List of Cases and Headnotes for Conspiracy to Injure

1)

Barbara Lim Cheng Sim v Uptown Alliance (M) Sdn Bhd & Ors [2013] 10 MLJ 1

The plaintiff sued the defendants for damages for slander, malicious falsehood and conspiracy to injure. The plaintiff was the Malaysian Director of the first defendant. The second defendant was the Group Vice President while the third defendant was the Regional Human Resource Manager. The fourth defendant was the Vice President, Korea, Taiwan, Singapore and Malaysia. In an unlawful and devious attempt to terminate the plaintiff's employment, the third and fourth defendants presented an undated agreement ('the termination agreement') which was pre-signed by the second defendant. The plaintiff refused to resign voluntarily. The first defendant then terminated the plaintiff's employment on the ground that it no longer had any trust and confidence in the plaintiff. The plaintiff then initiated proceedings against the first defendant in the Industrial Court on the ground of unfair dismissal. In a case management in the present court, the plaintff's counsel prepared and filed in court an additional common bundle of documents ('the additional CBDs') which the plaintiff wished to rely upon for the purpose of the trial. The defendants raised an objection to the inclusion of the documents ('the three documents') which related to the case in the Industrial Court between the plaintiff and the first defendant. The three documents were the statement of case; the statement in reply; and the award by consent of the Industrial Court. The issue raised by the defendants was whether the three documents ought to be expunged from the CBDs; and whether the plaintiff could make any reference to the three documents or any issue arising from her claim in the Industrial Court case in the trial of the present suit. However, the plaintiff argued that the confidentiality clause was not a 'finality clause'; the three documents were public documents under s 74 of the Evidence Act 1950 ('the Act'); the three documents were relevant as they were in respect of the unfair dismissal; the parties were bound by their pleadings and as such, the principle of estoppel applied; copies of the three documents were admissible in evidence; and the defendants did not object to the three documents on the sole ground of confidentiality. Held, dismissing the claim:

The court, accordingly, ordered the three documents to be expunged and to be excluded for use and reliance by the plaintiff for the purposes of the trial in the present suit. The court also ordered that the plaintiff be disallowed from referring to the three documents in the trial of the plaintiff's present suit (see para 66). Although the three documents were public documents, they were documents which were protected from disclosure and production in the trial of the plaintiff's present suit by virtue of the express terms of the settlement agreement arrived at by the parties in the Industrial Court case according to which substantial amounts of money has been paid to the plaintiff (see para 68). In view of the confidentiality of the communications made between the parties in respect of the Industrial Court's case and the express terms of the settlement agreement in respect of the Industrial Court's case, the three documents were protected from disclosure, production and admission during the full trial of the plaintiff's present suit on

the ground that they were protected by s 23of the Act from production as there was an express agreement between the parties to that effect (see para 74). By virtue of the express terms of the settlement agreement in respect of the Industrial Court's case where a substantial sum of money was paid to and accepted by the plaintiff on a 'strictly without prejudice basis', and without admission of liability whatsoever, the doctrine of estoppel was applicable to defeat the attempt by the plaintiff to rely on the three documents in the Industrial Court's case in the trial of the plaintiff's present suit for any purpose whatsoever, including the intention of the plaintiff's learned counsel to cross examine the defendants' witnesses on the alleged inconsistencies between the defendants' pleaded case in the Industrial Court's case and the defendants' pleaded case in the plaintiff's present suit (see para 75). The doctrine of res judicata was applicable to defeat the attempt of the plaintiff to rely on the three documents in the trial of the plaintiff's present suit for any purpose whatsoever, including the intention of the plaintiff's learned counsel to cross examine the defendants' witnesses on the alleged inconsistencies between the defendants' pleaded case in the IC case and the defendants' pleaded case in the plaintiff's present suit. As the plaintiff had agreed and represented to the first defendant that she would not make any further claims relating to or arising out of the Industrial Court claim. In consideration of the out of court settlement between the parties, it would be clearly unconscionable for the plaintiff to now attempt to refer to the pleadings filed in the Industrial Court to rehash the issues which have already been settled between the parties. The court ought not to condone the unconscionable conduct of the plaintiff. To do so would be contrary to the spirit and intent of the settlement agreement and contrary to the representations made by the plaintiff to the first defendant prior to or at the time of the execution of the settlement agreement (see paras 75, 7980). The argument put forth by learned counsel for the plaintiff to justify the inclusion of the three documents for use in the trial of the plaintiff's present suit ought to be allowed. It was precisely because of the express terms of the settlement agreement that the court ought not to allow the plaintiff to reopen the issue or issues in the Industrial Court case in this proceeding (see para 97).

2)

Repco (M) Sdn Bhd v Tan Toh Fatt & Ors [2013] 7 MLJ 408

The plaintiff was a company dealing with the distribution and sale of automotive spare parts for after sale market. The plaintiff commenced the action against all the defendants for alleged breach of confidentiality, breach of good faith and fidelity, conspiracy to injure, false allegations, unlawful interference, 'poaching' of employees, 'poaching' of suppliers for product lines and economic sabotage. The first to the seventh defendants were all former employees of the plaintiff. The eighth and ninth defendants were incorporated on 5 May 1994 and 8 November 1995 respectively. The defendants however pleaded that the plaintiff's claim did not disclose a cause of action in law.

Held, dismissing the plaintiff's claim with costs:

In order to establish the defendants' liability for breach of confidentiality, it must be proved that the information sought to be protected was confidential in nature; that it had been communicated in circumstances importing an obligation of confidence; and that the information was used in an unauthorised way and to the plaintiff's detriment. Based on the evidence, the plaintiff had failed to meet the requirements (see paras 33 & 35). It was evident that the list of the customers in the automotive spare parts industry was freely available in the market. Further, the first, second, third and fourth defendants were senior employees of the plaintiff with extensive experience in the automotive industry. In view of their length of experience in the industry the defendants would have undoubtedly acquired the information and knowledge about the customers through their years of dealings with the customers as part and parcel of their scope of duties in the plaintiff. So long as the defendant did not obtain the information and or acquired the knowledge surreptitiously it could not be said that it constituted a trade secret. Knowledge on the part of the defendants of the information did not constitute trade secrets which are considered proprietary rights which warranted protection by this court. In the circumstances, the plaintiff had failed to prove their pleaded case of breach of confidentiality or trade secret against the defendants. The plaintiff's entire case was founded on speculations and conjunctures (see paras 35(a), (b) & 36). The plaintiff also could not contend that the first to the seventh defendants were not entitled to join another company and compete with the plaintiff as the evidence had shown that it was not part of the term of their employment that they could not compete with the plaintiff if they had decided to resign and or retire from the plaintiff. In any event, any clause which restricts the defendants from joining another company with similar trade tantamount to restraint of trade and is void pursuant to s 29 of the Contracts Act 1950 (see para 35(k)). PW2 and PW3, the plaintiff's witness and representatives of NGK, testified that NGK Spark Plug Malaysia ('NGK') had the prerogative to appoint whichever company it had faith in to market its products. PW2 had also confirmed that the plaintiff was never appointed as the exclusive distributor of NGK. Hence, the plaintiff's assertions of breach of good faith and fidelity pertaining to NGK Spark Plugs were merely bare allegations unsupported by reliable and credible evidence. The court was therefore satisfied that the plaintiff's claim that the first to seventh defendants had approached and persuaded NGK to cease their business and/or reduce their supply to the plaintiff was without merits and ought to be rejected (see paras 39, 43 & 45). None of the plaintiff's employees testified that the first to seventh defendants had approached them to coax them to leave the plaintiff and work for the eighth defendant. The plaintiff also could not provide the statistics to show the number of its employees who had left the plaintiff to join the eighth defendant or identify who were the plaintiff's employees who were currently working for the eighth defendant. Thus the plaintiff's allegation of 'poaching' of its employees by the defendants was merely bare assertion unsupported by evidence either testimonial and or documentaries. The plaintiff also had not adduced credible evidence to demonstrate that the defendants had caused the

plaintiff's other suppliers to terminate the plaintiff's distributorship rights and grant the eighth defendant those rights (see paras 46, 5254). Further, the plaintiff's own witness testified that it was common knowledge that the plaintiff was diverting its business and focusing on the gaming industry and that it was in the news. The fact was further supported by the Annual Reports of Repco Holding Bhd, a parent company of the plaintiff, which disclosed that the plaintiff was moving from its automotive parts business to gaming and timber industry (see para 57). Based on the evidence adduced in the instant case, the plaintiff had failed miserably to meet with the standard of proof to establish any allegation of conspiracy to defraud beyond reasonable doubt. It is settled law that the assertion of conspiracy requires the strictest pleading and must be supported by full particulars. However, the plaintiff had failed to properly plead the particulars to support its case of conspiracy to injure. Further, the plaintiff did not prove that there were overt acts on the part of the first and second defendants which had resulted in the loss suffered by the plaintiff, an essential ingredient in the tort of conspiracy (see paras 6365). The plaintiff's allegation that the first defendant had purposely paid commission upon sales and not upon collection with the aim to injure the plaintiff and in preparation of the first defendant's resignation was not proved by way of documentary evidence. The plaintiff merely produced records for the commission paid to support its contention of payment of commission upon sales and not upon collection (see paras 7273). On the totality of evidence both testimonial and documentary the court was satisfied that the plaintiff had failed to discharge the onus placed on it by the law to prove its case against all the defendants on the balance of probabilities and/or beyond reasonable doubt whichever was applicable to the plaintiff's pleaded case (see para 79).

3) Deepak Jaikishan a/l Jaikishhan Rewachand & Anor v Intrared Sdn Bhd (previously known as Reetaj City Centre Sdn Bhd and formerly known as KFH Reetaj Sdn Bhd) & Anor [2013] 7 MLJ 437 HIGH COURT (KUALA LUMPUR) The plaintiffs ('Deepak' and 'Ezul') were shareholders and directors of the second defendant ('Prestige Scale') which entered into a sale and purchase agreement ('SPA') to buy a building owned and under construction by Glomac. Prestige Scale sought financing for the purchase from Kuwait Finance House (M) Sdn Bhd ('KFH') which agreed to provide the funds on condition it had equity participation in the acquisition of the building. Later, as Deepak and Ezul wanted to sell their shares in Prestige Scale and KFH wanted to buy the building for itself, KFH incorporated the first defendant ('Intrared') to buy the plaintiff's shares in Prestige Scale. Intrared signed a share sale and purchase agreement ('SSPA') with the plaintiffs making it the owner both of the plaintiffs' shares and of Prestige Scale although the balance of the purchase price for the shares ('the balance purchase price') had yet to be paid to the plaintiffs. By a deed of assignment, to which Intrared consented, the plaintiffs assigned all their rights to the balance purchase price to Bank Rakyat in consideration for a loan which equalled the balance purchase

price. Intrared undertook to pay the balance purchase price to Bank Rakyat in stages as stated under the SSPA while KFH issued an Irrevocable Letter of Undertaking to unconditionally and irrevocably pay the plaintiffs or Bank Rakyat the balance purchase price without having to get Intrared's prior consent. Intrared subsequently informed the plaintiffs that because it had discovered a 'cl 47' in the Development Order ('DO') permitting only Glomac and its subsidiaries to occupy the office space in the building, it would stop payments in respect of the balance purchase price to Bank Rakyat until the issue of cl 47 was resolved. Intrared claimed cl 47 destroyed the substratum of the SSPA as the purpose of its share purchase in Prestige Scale was to allow it, and KFH, to eventually acquire office space in the building. KFH toed Intrared's line and similarly refused to honour its obligation to pay under the Irrevocable Letter of Undertaking. As the combined actions of Intrared and KFH threatened to cause the plaintiffs to default in their loan agreement with Bank Rakyat, the plaintiffs urged the two parties to fulfill their obligations pointing out that the SSPA was a separate matter from the SPA. Deepak even volunteered to assist in resolving the issue of cl 47 by organising a meeting between all parties concerned. Intrared and KFH nevertheless suspended payments towards the balance purchase price and matters returned to normalcy only after Kuala Lumpur City Hall deleted cl 47 from the DO. By that time, since Bank Rakyat had failed to receive the scheduled payments from Intrared or KFH, it held the plaintiffs to be in default setting off a chain of events which included the bank recalling the loan and demanding repayment, the plaintiffs being blacklisted in Bank Negara's defaulters' list resulting in their being unable to obtain financing from other institutions, damage to the plaintiffs' reputation and goodwill and causing them to lose investment opportunities in other transactions and making them liable to pay Bank Rakyat late penalty charges and interest totalling RM1,011,497.41. The plaintiffs claimed that Intrared and KFH had by their deliberate breaches of their respective obligations conspired to injure the plaintiffs economically. The plaintiffs claimed Prestige Scale should be made equally liable for the losses they had suffered because it was the alter ego of Intrared. Intrared denied it had conspired to injure the plaintiffs and said such a claim was in any case unmaintainable as KFH was no longer a party to the action, the claim against it having been discontinued following a settlement agreement. Intrared said it had no option but to cease making payments under the SSPA for its own protection because if it had terminated the agreement the plaintiffs would not have been able to repay the substantial sums that had already been paid thereunder. Intrared also contended that even if it was guilty of committing a breach, Deepak had, by his involvement in trying to resolve the issue of cl 47, waived the breach. Held, allowing the plaintiffs' claim only against Intrared in part with costs:

Intrared's act of suspending payment indefinitely was wrong and breached the SSPA. The gravity of the breach was borne out by the fact it was aware the payment of the balance purchase price went towards meeting the plaintiffs' repayment obligations to Bank Rakyat (see para 72). Prior to the entry into the SSPA, Intrared's solicitors had undertaken a due diligence exercise which made express reference to the Development Order. As its solicitors had full knowledge of the subsistence of the DO, Intrared was presumed to have had knowledge not only of the subsistence of the DO but also of its contents. Its stance that it

only became aware of the existence of cl 47 in the DO much later was untenable and less than credible (see paras 70 & 72). The fact the plaintiffs sought to assist Intrared in respect of Prestige Scale's contract with Glomac over cl 47 in no way impinged upon, abrogated, negated or waived Intrared's obligation to pay the plaintiffs under the SSPA (see para 84). The fact that both Intrared and KFH determined at the same time not to honour their separate obligations under two different contracts evidenced concerted action or an agreement or combination of action by them against the economic interests of the plaintiffs. Both entities were fully aware of the consequences of their action on the plaintiffs' loan repayment obligations to Bank Rakyat (see paras 108 & 137). The evidence showed Intrared appeared to hold a grudge and fault Deepak for the subsistence of cl 47 and for allegedly failing to highlight it to them. The existence of such a 'grudge' was inferable from Intrared's conduct in breaching its obligations when in fact such breach could not in law alleviate the problem caused by cl 47. The decision to cease payments was only capable of one construction, namely, to cause injury to the plaintiffs by causing them to default on the loan to Bank Rakyat (see para 144). Intrared's contention that it could not terminate either the SSPA or the SPA was untenable. The recourse of terminating the agreement with the plaintiffs was available to it and it was no excuse to contend the plaintiffs were 'unlikely to be able to repay the monies'. That would have been the correct legal position to adopt rather than effecting a breach of the SSPA which provided no remedy in relation to the SPA between Prestige Scale and Glomac. The only inference that could be drawn was that Intrared and KFH intended to injure the plaintiffs' economic interests. Even if it was accepted that Intrared deliberately ceased to honour its contractual obligations to protect or promote its own economic interests, that was sufficient to satisfy the mental ingredient or 'intention' required for the tort of conspiracy to injure (see paras 149, 151 & 153). The absence of KFH as a party to the action did not prohibit the plaintiffs from pursuing with or succeeding on the tort ofconspiracy to injure. There was no evidence the plaintiffs had voluntarily released KFH in relation to the cause of action in conspiracy (see para 170). The veil of incorporation of Prestige Scale ought not to be lifted as it was not liable to the plaintiffs per se for the breach of contract and conspiracy to injure. Neither was Prestige Scale used as a device or faade to conceal Intrared's liability in relation to its wrongdoing (see paras 191 & 190 (v)). The plaintiffs had succeeded in establishing they had suffered the imposition of late payment charges and interest amounting to RM1,011,497.41 levied by Bank Rakyat. It was the natural and readily forseeable consequence of the failure to pay the loan instalments due under the facility at the requisite time. The cause for the levy of the said sum was the breach of contract by Intrared (see para 210). By reason of the conspiracy to injure on the part of Intrared and KFH, the plaintiffs lost their credit rating as a result of being placed on a defaulters' list and they were entitled to compensation for such loss. Their companies also suffered financial losses as a result of the lack of further financing. Given this composite evidence, a sum of RM1m was reasonable compensation for the loss so suffered. The said sum was due to the plaintiffs

whether the damages arose from the breach of contract cause of action or from the conspiracy to injure (see paras 242, 247 & 248).

4) Low Chee & Sons Sdn Bhd & Anor v Extreme System Sdn Bhd and another appeal[2013] 1 MLJ 650 The respondent in the appeals herein had brought an action in the High Court to, inter alia, declare that all the defendants named in the action (apart from the first defendant) had acted in concert to control the first defendant company ('Ho Hup') and had breached the Code on Takeovers and Mergers 1998 ('the Code') and the Securities Commission Act 1993 ('SCA') in failing to make a mandatory general offer of Ho Hup's shares. The respondent sought damages for breach of the Code and the SCA. It had also attempted, but failed, to obtain an injunction to prevent an extraordinary general meeting of Ho Hup from being convened. The second to the eighth defendants in the action (the appellants in the appeals herein) applied to the High Court under O 14A of the Rules of the High Court 1980 to seek its determination on three questions of law to summarily dispose of the action. The three questions essentially concerned whether the respondent had a private law cause of action and locus standi to maintain the action. Despite the respondent arguing that the O 14A procedure was inappropriate as the facts were in dispute, the High Court ruled the facts pleaded in the statement of claim could be assumed to be true and determined the questions in favour of the respondent. Dissatisfied with that decision, the defendants filed the instant appeal to the Court of Appeal. Held, allowing the appeal with no order as to costs, setting aside the High Court's decision and remitting the case back to the High Court for full trial of the action:

The O 14A procedure was not suitable in the instant case as there were conflicting allegations of fact (see para 15(a)). For O 14A to be invoked all material facts relating to the subject matter of the claim must be undisputed or admitted. It could not be invoked on the basis of assumed facts as was done in this case. The court should not give a ruling under O 14A in vacuo or based on hypothetical facts. The crux of the plaintiff's claim was that the defendants had acted in concert to take over Ho Hup in breach of the Code and the SCA. Those factual allegations were vehemently denied by the defendants (see para 15(a)). The O 14A procedure in the present case did not dispose of a substantial part of the action and therefore there was no saving in costs and time as the same evidence needed to be led with respect to the remaining causes of action ie for collateral and improper exercise of rights by shareholders and for conspiracy to injure the interests of Ho Hup. The claims for these causes of action were still good and entailed leading evidence at trial, the same evidence showing breaches of the Code and the SCA (see paras 15(c)-(d)).

5)

Tekital Sdn Bhd v Sarina bt Kamaludin & Ors[2012] 8 MLJ 734

The plaintiff company, wholly owned by two Italian nationals, sued the defendants for fraud and for the tort of conspiracy to injure by unlawful means. The plaintiff had invested RM1.2m in a company known as Auto Parking Inc Sdn Bhd ('API') which was in the business of operating and managing automated car parks. In return, the plaintiff was given a 10% shareholding in API and a right to 10% share of API's profits periodically. The plaintiff was also assured its shares in API could be repurchased upon the close of the venture at RM7 per share and that in the event of default in payment of the profits or the venture failing, API would, on the plaintiff's demand, repurchase the plaintiff's 10% shareholding. Apart from a single payment of profits, no further payments were made to the plaintiff and neither were its shares in API repurchased. API, which once managed 16 car parks and its systems, was subsequently wound up. The plaintiff contended that from the time it was foreseen that API was becoming increasingly insolvent, the first, second and third defendants conspired to unlawfully strip, siphon off or remove the assets, business and operations of API and transfer them to the fourth, fifth and sixth defendants, which entities they were in control of variously as directors and/or shareholders, and through those companies carried on the very same business and operations which API had. The net effect of their actions was to deprive all creditors, including the plaintiff, recourse to the assets of API to make good the losses and damages they had suffered. The plaintiff sought a return of its RM1.2m working capital and an account of profits due to it from API since 2005. Held, allowing the claim:

The first, second and third defendants acted in concert to siphon off or transfer the assets and business of API to the fourth, fifth and sixth defendants which they controlled. API was in financial difficulties and on the point of liquidation when these businesses were transferred (see para 48). Proof of the agreement or combination between the first, second and third defendants to transfer the business and assets of API to the other defendants could be inferred from the net result of their concerted activities over the relevant period (see para 106). The unlawful actions of the defendants were clearly evident and apparent from the fact that assets of API were transferred out before and after the presentation of a winding up petition against it as well as during the winding up and thereafter, thereby diverting assets that should have been lawfully available for division and distribution between the general body of creditors (see para 107). The plaintiff had suffered loss and damage as API failed to pay the plaintiff the profits due to it from the year 2005 together with the return of the working capital of RM1.2m with interest despite demands to that effect (see para 112). Chang Yun Tai & Ors v Dataran Mantin Sdn Bhd & Ors[2011] 3 MLJ 701

6)

All 178 plaintiffs alleged they were defrauded by the first to sixth defendants. It was alleged that the plaintiffs were induced, through fraudulent representations made by first defendant and other associated companies of the first defendant, to purchase apartments ('properties') in a project developed by the first defendant. The representation alleged by the plaintiffs was that

the properties would generate guaranteed returns of 8%pa for a period of 15 years derived from rentals from immediate student population once the project was completed. The purchase of the properties were financed by certain financial institutions and the plaintiffs alleged that these financial institutions had allowed themselves to be represented as endorsing the project. The properties were developed on land belonging to the seventh defendant who was the local authority under a power of attorney given by the seventh defendant to the first defendant. The plaintiffs contended, inter alia: (i) that the power of attorney did not comply with the requirements of the Power of Attorney Act 1949 and that the granting of the power of attorney was ultra vires the powers of the seventh defendant under the Local Government Act 1976; (ii) that the guarantee returns scheme devised by the first defendant and managed by the fourth defendant was an investment contract within the meaning of s 84 of the Companies Act 1965 ('the Act') and as such, the first defendant's failure to comply with Part IV Division 5 of the Act rendered the guarantee returns scheme illegal; (iii) that since the guarantee returns scheme was a collateral contract to the sale and purchase agreements ('SPAs'), the SPAs were illegal and/or void under s 24(b) and s 65 of the Contracts Act 1950; and (iv) that if a financier provides finance for illegal businesses, the financier is aiding and abetting the wrong doing. The plaintiffs claimed that since the SPAs and the associated guarantee returns scheme were void, the financing agreements were also void and unenforceable. Various striking out applications were filed by the defendants. Held, allowing applications in part:

It is settled law that a weak and unlikely to succeed case is not a ground to strike out. If the plaintiffs can show some cause of action or some question fit for further investigation at the trial then the striking out should be refused (see para 9). The state of the law as stated in Phileoallied Bank (M) Bhd v Bupinder Singh a/l Avatar Singh & Anor [2002] 2 MLJ 513 and Nouvau Mont Dor (M) Sdn Bhd v Faber Development Sdn Bhd [1984] 2 MLJ 268 have changed due to the amendment to the Housing Development (Control and Licensing) Act 1966. Under the new s 22C, a homebuyer shall be entitled on his own volition and his own name to commence and maintain any action in respect of any matter arising out of the SPA notwithstanding the assignment. The plaintiffs could avail themselves the benefits of s 22C and therefore had the locus to commence the action against the second and sixth defendants (see paras 1516). The issue as to the legality of the agreements was definitely an issue to be tried. The issue whether the guarantee returns scheme was a collateral contract to the SPAs and whether it was represented as an inducement to the plaintiffs to enter into the SPAs were also triable issues. The issue as to whether the seventh defendant had the authority to make the power of attorney in favour of the first defendant was also a triable issue (see paras 17, 24 & 26). The relationship between the plaintiffs and the banks is purely commercial in nature strictly on a quid pro quo basis that the monies are lent to be repaid in accordance with the terms and conditions of the loans agreements. The banks as loan provider should

not be concerned with the propriety or legality of any contracts entered into between the developer, or any other persons (see para 41). The ninth, tenth, 11th, 13th and 15th defendants (bankers) were not privy to the SPAs and the guarantee returns scheme agreements. The SPAs were completed and the monies under the loan agreements were disbursed to the first defendant. Since the plaintiffs were now trying to rescind the contracts with the banks and were seeking an equitable remedy, the plaintiffs themselves had to do equity by returning the benefits received under the loan agreements. The plaintiffs had not shown this in their affidavits or pleadings. Therefore, the plaintiffs' claim against these defendants was obviously unsustainable and an abuse of the court process (see paras 40 & 42). The 20th defendant provided financing only to three of the 178 plaintiffs. The rest of the plaintiffs had no dealing with 20th defendant and the 20th defendant had not endorsed the project. Therefore the plaintiffs had no reasonable cause of action against the 20th defendant. Just because the 20th defendant had filed a counterclaim seeking declaratory relief did not give the plaintiffs a cause of action against the 20th defendant (see para 44). There were several end financiers for the project but not all of them endorsed the project. The plaintiffs' arguments that endorsing banks were agents or in collusion with the first to sixth in a conspiracy to injure the plaintiffs could not be true. The endorsement of the project by the endorsing banks does not make the banks a complicity in the purported conspiracy to injure the plaintiffs (see para 47).

7) Keep Good Feel Corp Sdn Bhd (previously known as Fasa Bebas Sdn Bhd) & Anor v Pharma World (M) Sdn Bhd & Ors[2010] 1 MLJ 242 The first plaintiff was the manufacturer of a product known as 'Lady Gold', which offered gynecological benefits. The distinguishing features of the product was the deployment of three kanji characters written in Chinese which translated as 'golden imperial courtesan' with a drawing of a young Oriental lady in traditional attire below it. It was the plaintiff's complaint that the defendant had been offering for sale a product which offered gynecological benefits that bore a similar branding as that of the plaintiff's product. According to the plaintiff, the defendant's product had two kanji characters written in Chinese which were identical with the plaintiff's product and translated to 'imperial courtesan' with a picture of a young Oriental lady in traditional attire below it. Thus it was the plaintiffs' complaint that the defendants had marketed their product using a similar get-up as the plaintiffs and that this constituted passing off. Although, the defendants' product was already in the market before the plaintiffs' product was launched the plaintiffs alleged that that the defendants had subsequently marketed their product using the similar get-up as that of the plaintiffs. The plaintiffs then issued several notices to the defendants requesting that the latter cease dealing in the defendants' product which bore a confusingly similar mark. However, despite these notices the defendants had placed an advertisement in the Sin Chew Jit Poh, which in the plaintiffs' view contained an imputation that the plaintiffs' product was a counterfeit whereas the defendants' product was genuine and authentic. The defendants denied that their product bore any resemblance to the plaintiffs' product and claimed that they were perfectly entitled to place the advertisement. In

consequence, the plaintiffs filed the present action against the defendants for passing off, conspiracy to pass-off, conspiracy to injure the trade of the plaintiffs, malicious falsehood and slander of goods and infringement of trademark under the Trade Marks Act 1976. By way of this action the plaintiffs sought an injunction to restrain the defendants from, inter alia, producing or selling their product; an injunction to restrain the defendants from using the two kanji characters written in Chinese for their product; a declaration that the defendants indemnify the plaintiffs for all expenses incurred by the latter in protecting its proprietary rights in the 'Lady Gold' trademark; special damages; general damages and costs. In their defence the defendants submitted that there was no similarity between their product and the plaintiffs in terms of packaging, design, colour and name and as such no confusion or deception was created. Further, the defendants also submitted that there was no act or conspiracy to passing off and that the plaintiff had failed to prove the establishment of goodwill and reputation of their product at all material times. Held, dismissing the plaintiffs' application with costs:

Upon examining the plaintiffs' and defendants' product it was found that the two products did not look similar. The defendants' product carried a very colourful symbol of the two kanji characters and looked livelier than the three kanji characters of the plaintiffs' product. The colour of the packaging of the plaintiffs' product was also entirely different from the defendants' product. The wording related to the ingredients and other writings on the box of the plaintiffs' product were totally different from the defendants' product. Based on these and many other differences it was clear that the plaintiffs had failed to prove that the defendants' had used a similar get-up (see para 61(a)). The increased literacy level of the Chinese community in Malaysia at the age group of purchasing gynecological products such as those offered by the plaintiffs and defendants, was sufficient for them to identify and distinguish the plaintiffs' and defendants' product. As such there was no basis for the plaintiffs' complaint of passing off or cause of action for malicious falsehood and slander of goods or infringement of trademark by relying on old common law cases on passing off to initiate proceedings (see para 61(b)). The plaintiffs had the legal burden to show that they had acquired goodwill for their product. However, the plaintiffs had only adduced evidence of two years of sales which was a similar period during which the defendants had also promoted their product. As such the plaintiffs were unable to establish the elements of goodwill according to law to succeed in a passing off action (see para 61(c)). The plaintiffs' contention that the protection sought was not in relation to the brand name in English but the kanji characters of the same name was totally erroneous and departed from the pleadings and evidence. In addition, the plaintiffs in this case had voluntarily courted trouble by using the name 'imperial courtesan' for their product when it could be argued that the name was generic (see para 61(d)). The cases relied upon by the plaintiffs although good law had no relevance to the facts of this case (see para 61(e)).

8) Mayban Finance Bhd vOtahulu Industries (M) Sdn Bhd & Ors[2008] 7 MLJ 616 Sometime in year 1997, the third and fourth defendants received a notice of demand from the plaintiff alleging that they were guarantors for a loan granted by the plaintiff to the first defendant. Upon verification of the alleged guarantee in the plaintiff's office, the third and fourth defendant protested and informed the bank officer that their signatures on the documents were forgeries. The plaintiff took no action to investigate but instead, initiated this suit against the defendants to recover the loan granted to the first defendant. In the statement of claim, the third and fourth defendants were said to be the guarantors of the loan and the plaintiff claimed from them for the repayment of the same. The third and fourth defendants counterclaimed for negligence and conspiracy to injure. The third defendant also counterclaimed for defamation. Held, allowing the third and fourth defendants' counterclaim with costs:

It was an agreed fact that the signatures on the hire purchase agreement, alleged to be that of the third and fourth defendants, were forgeries. It was also an agreed fact that the plaintiff had entered the third defendant's name in the financial information system ('FIS'). It was defamatory to the third defendant for the plaintiff to supply the third defendant's particulars to the FIS because the financial community regarded such information to mean that the third defendant was prima facie a defaulting borrower; whereas the truth was that the third defendant was neither a borrower nor a guarantor (see paras 78 & 27). There was a conspiracy between the plaintiff and a third party to make use of the forged signatures of the third and fourth defendants. The guarantee form that contained the forged signatures of the third defendant and fourth defendants was throughout in the possession of the plaintiff bank. Based on the forged signatures, the plaintiff had approved a loan to a third party and had released the money; and the third party had defaulted in the repayment. It was on the basis of the forged signatures that the plaintiff filed the present civil suit against the third and fourth defendants (see para 28).

9) DATO' SERI S SAMY VELLU v PENERBITAN SAHABAT (M) SDN BHD & ORS (NO 2) [2005] 5 MLJ 539 The second defendant had passed away. His death gave rise to the question of whether the various causes of action in the plaintiff's amended Statement of Claim would abate. In the amended Statement of Claim, the plaintiff claimed for the following causes of action: (a) damages for the tort of conspiracy; (b) damages for the tort of malicious falsehood; and (c) damages for the tort of libel. Held:

The tort of conspiracy related to conspiracy to injure by publishing defamatory statements. It was a pure and simple cause of action for defamation. It was also a cause of action for libel which derives its origin from the root word 'defamation'. But, under the law, there is no separate tort of conspiracy to defame by publishing defamatory

statements. And, under the law too, the tort of conspiracy to defame by publishing defamatory statements merge with the plaintiff's claim for libel: Ward v Lewis & Ors [1955] 1 WLR 9 which was adopted by the Malaysian High Court in Mrs Kok Wee Kiat v Kuala Lumpur Stock Exchange Bhd & Ors [1978] 2 MLJ 123. It must abate with the death of the second defendant (see para 29). An action for libel is captured by the provision to s 8(1) of the Civil Law Act 1956 thereby excluding the general application of that section to the tort of defamation. A personal action dies with the person when the person dies. This was what had happened to the deceased second defendant. This cause of action for libel must abate with the death of the second defendant (see para 31). The tort of malicious falsehood survives and that the case of Mrs Kok Wee Kiat v Kuala Lumpur Stock Exchange Bhd & Ors [1978] 2 MLJ 123 is still good law and it is binding on this court. Since the claim against the deceased second defendant for malicious falsehood would protect the plaintiff's interest in the deceased second defendant's property the right of the plaintiff to sue the deceased second defendant survived and such right was transmitted to the deceased second defendant's personal representatives and administrators (see para 40). The tort of malicious falsehood was not caught by the proviso to s 8(1) of the Civil Law Act 1956 (see para 41).

10) PEKELILING TRIANGLE SDN BHD & ANOR v CHASE PERDANA BHD[2003] 1 MLJ 130 Under a contract made between the first defendant and the plaintiff, the plaintiff was employed to construct a commercial and apartment complex in Kuala Lumpur known as the 'Marinara' building ('the building'). It was a lump sum contract in the value of RM110m. The payment was guaranteed by an irrevocable bank guarantee of RM122.77m issued by Bank Bumiputra Malaysia Bhd in favor of the plaintiff. Payment under the bank guarantee would be made upon the issuance of the certificate of practical completion ('the CPC') by the architect of the building ('the second defendant'). The date for completion stipulated by the contract was 15 September 1997 but the plaintiff failed to meet the target date for completion and the date for completion was extended from time to time, the last of which was March 2000. The first defendant alleged that at the end of the last date for completion there was continuing default on the part of the plaintiff. After the issuance of notices by the second defendant and the consulting engineer specifying the major shortcomings, the plaintiff proceeded to remedy the same.The first and second defendants were not satisfied with the remedial works done by the plaintiff and the second defendant refused to issue the CPC. As such, the plaintiff was not able to claim payment under the bank guarantee. On 14 June 2000, the third defendant under the purported authority of the first defendant entered the building site with uniform guards, some of whom were armed with shotguns. The plaintiff then filed a writ action against the defendants based on trespass and conspiracy to injure the plaintiff's legitimate rights and interests under the contract. The plaintiff further filed an application in encl 8 at the High Court for injunctions to: (a) restrain the third defendant, its employees and agents from entering the project site without the plaintiff's written consent; (b) restrain the first and second defendants from proceeding with theirconspiracy to injure the plaintiff's rights and interests in the project and to prevent the

plaintiff from completing the project, including the issuance of any notice of termination in pursuance of the conspiracy. Meanwhile, the defendants filed an application in encl (16) to stay the plaintiff's writ action pending arbitration pursuant to the contract. The High Court allowed the plaintiff's application in encl (8) and dismissed the defendants' application in encl (16). In respect of encl (8), the learned High Court judge found that the facts presented had disclosed a bona fide serious issue to be tried and that the plaintiff would suffer an irreparable injury that could not be adequately compensated by damages if the injunction was not granted. As for encl (16), the learned judge was satisfied that the plaintiff had given sufficient reasons as to why the differences between the parties should not be referred to arbitration. He accordingly refused stay on the grounds, inter alia, that arbitration would not solve the parties' problems but would be a prolonged exercise and that the defendants had entered conditional appearance which amounted to taking steps in the proceedings. The learned judge went on to decide that it was best that the issues of conspiracy, trespass, issuance of the CPC and the termination of contract be heard together by the court. This was the defendants' appeal. Held, allowing the defendants' appeal:

There was a bona fide serious issue to be tried in the instant case. However, the learned judge had misapplied the law to the facts of this case when he held that the plaintiff would suffer an irreparable injury that could not be adequately compensated by damages if the injunction was not granted. The damages that the plaintiff would suffer were monetary in nature and quantifiable. Even if the defendants were not in a financial position to pay the damages, the means to compensate the plaintiff would always be there in the form of the bank guarantee. The bank guarantee was irrevocable and a claim on it can be made upon production of the CPC by the plaintiff to the bank within 14 days following the date of its issue. Therefore, if the plaintiff were to succeed at the trial, it would be adequately compensated by an award of damages for the loss it would suffer as a result of the defendants continuing to do what was sought to be restrained between the time of the application and the time of the trial. Hence, the plaintiff's application for the injunctions should have been refused, no matter how strong the plaintiff's claim appeared to be at that stage (see pp 142F143B);American Cyanamid Co v Ethicon Ltd [1975] 1 All ER 504 followed. The learned High Court judge must first be satisfied that the plaintiff would suffer an irreparable injury or that the plaintiff could not be adequately compensated in damages before proceeding to consider whether the balance of convenience laid in the plaintiff's favour. The second step was if damages would not provide an adequate remedy for the plaintiff in the event of it succeeding at the trial, the learned judge should then consider whether, if the defendants were to succeed at the trial in establishing their rights to do that which was sought to be restrained, they would be adequately compensated under the plaintiff's undertaking as to damages to the loss they would have sustained by being prevented from doing so between the time of the application and the time of the trial. If damages in the measure recoverable under such an undertaking would be an adequate remedy and the plaintiff would be in a financial position to pay them, there would be no reason to refuse an interlocutory injunction. The third step was that if there was doubt as

to the adequacy of the respective remedies in damages available to either party or to both, only then should the judge proceed to consider the question of balance of convenience. The last step was where other factors appeared to be evenly balanced, in which case the question of the preservation of the status quo would come into play. In the instant case, the learned High Court judge did not follow these steps at all but considered them all together, which was wrong. Since the first step had not been crossed, there was no need to consider other matters relating to the balance of convenience and the measures calculated to preserve status quo as elaborated by the judge (see p 143CH). The learned High Court judge was swayed by the fact that the plaintiff had constructed the building at its own costs and the second defendant had certified the sum of RM102,428,245.83 to be the estimated value of the works done. Such reliance was misplaced because under the contract, the issuance of the interim statements by second defendant was solely for the purpose of the plaintiff's monthly drawdown from its financial institution for work done on the site and no payment can be demanded from the first defendant based on the interim statements of work done. The judge also relied on the favorable article regarding the building in the local newspaper. Such reliance was wrong because the newspaper article was merely for publicity in the interest of business efficacy and this did not mean that the major shortcomings bore no truth (see pp 144H 145C). The decision in granting the injunctions and the making of the orders was unjust because the first defendant was compelled to continue to employ the plaintiff notwithstanding that the latter could not deliver the building on time and in accordance with the approved specification. By the injunctions, the plaintiff was allowed to remain in possession of the site, thus aggravating the existing stalemate between the parties and by the injunctions, the first defendant was virtually forced to accept the major shortcomings even though some of them were contrary to the approved specification. Accordingly, since the learned judge had manifestly proceeded on wrong grounds in the exercise of his discretion to grant the injunctions and in making the orders, this court was entitled to interfere (see p 145CG). The defendants were at all times ready and willing to do all things necessary to the proper conduct of the arbitration. The onus was on the plaintiff to satisfy the court that it was proper to refuse the application for stay and strong grounds for refusing a stay must be exhibited by the plaintiff. Generally however, the approach of the court would be that parties who made a contract to arbitrate their disputes, should be held to their bargain (see p 146DF). The learned judge referred to four authorities with regard to whether entering conditional or unconditional appearance amounted to taking steps in the proceedings. However he did not make a clear cut finding as to which authority he followed. Therefore, going by the hierarchy, the court was inclined to followInterscope Versicherung Sdn Bhd v Sime Axa Assurance Bhd where the Court of Appeal held that the entry of an unconditional appearance constituted the taking of a step in the proceedings. Hence, in the instant case, since the defendants had entered a conditional appearance and merely applied for stay, the same did not amount to the taking of a step in the proceedings within the

meaning of s 6 of the Arbitration Act 1952 (see p 147A-E); Interscope Versicherung Sdn Bhd v Sime Axa Assurance Bhd [1999] 2 MLJ 529 followed. The learned judge had proceeded on wrong grounds in refusing the stay. An arbitration process would be more expeditious because the sole issue to be resolved would be whether the CPC should be issued. On the other hand, since court proceedings, were usually protracted, the completion of the construction of the building would be prolonged. Even though the court had the jurisdiction to hear the dispute, it was apt that the dispute be settled by arbitration as the question of the issuance of the CPC was technical in nature. In this regard, an independent arbitrator with vast knowledge and experience in the construction industry would be more ideal for the purpose. Accordingly, the learned High Court judge could not have been satisfied that the plaintiff had exhibited strong grounds for refusing a stay. This warranted interference by this court (see pp 147F I, 148FG). It would be unjust to prevent the defendants from going to arbitration and to force them to have their rights determined by litigation. Further, there was no good reason for the plaintiff to decline to honor its bargain under the contract to settle the dispute by arbitration. Since there was no inherent objection to an action and an arbitration proceeding side by side, the issues of conspiracy and trespass can be adjudicated upon by the court and those issues that had arisen from the disputes under the contract can be adjudicated upon by an arbitrator (see pp 147G, 148DE).

12) SIMMAH TIMBER INDUSTRIES SDN BHD v DAVID LOW SEE KEAT & ORS[1999] 5 MLJ 421 The plaintiff, and the first and second defendants entered into a lease-back agreement dated 2 January 1986 ('the agreement'). Under the agreement, the second defendant would transfer, among others, all his shares in the plaintiff to the first defendant and settle in full all outstanding loans and liabilities of the plaintiff, in consideration that the plaintiff would transfer its assets as enumerated in a schedule, a lease of land and the tenancy of its office to the second defendant. The second defendant would, thereafter, lease-back the assets, and assign and transfer the tenancy back to the plaintiff. The first defendant, having gained control of the plaintiff, entered into a sub-lease agreement, dated 1 January 1986, with the third defendant. Under the sublease agreement, the third defendant would pay the plaintiff monthly rental and electricity and water charges in consideration to the plaintiff for sub-letting a portion of its business premises. The plaintiff's claims, as against the first defendant, as director and trustee of the company, an account of all monies received under the sub- lease agreement and payment of all sums received and found due after the taking of the account, and as against the second defendant, as constructive trustee, similar account and payment of all sums found due from the second defendant to the plaintiff. Alternatively, the plaintiff's claim against the first, second and third defendants is damages for conspiracy to injure. In addition, the plaintiff contended that the agreement was in contravention with s 67 of the Companies Act 1965 ('the Act'). The second defendant, however, argued that the agreement fell within s 67(2)(c) of the Act which provides for the giving of financial assistance by a company to its employees to purchase fully-paid shares in the company.

1999 5 MLJ 421 at 422 Held, allowing the plaintiff's claim:

In all the circumstances, the court found that the first defendant had indeed taken the monies paid by the third defendant for the sub-rentals and the electricity charges and that he did not account at all to the plaintiff (see p 431G). The first defendant had clearly breached his duties as a director under s 132 of the Act, and as a fiduciary of the plaintiff as he had obtained secret profits for himself. He must therefore render a true and complete account to the plaintiff and to pay the plaintiff for all sums due and arising therefrom. By the agreement, the first defendant had received shares in the plaintiff by transferring the company's assets to the second defendant. This is a clear case of fraud upon the company by its director (see p 432I). There was a depletion of monies due to the company when monies were paid out to the second defendant and a depletion of the company's assets when the assets were transferred to the second defendant, and thereafter, by them being leased back to the company for which payments were made. This is not rendering financial assistance to the employees of the company to buy into the shares of the company, but a cleverly planned subterfuge to deplete the company of its assets (see p 436FG). The law of conspiracy consists of an agreement of two or more persons to do an unlawful act or to do a lawful act by unlawful means, for the purpose of injuring another whereby the said act results in damage to the other. On the evidence available, there was conspiracy to injure between the first and second defendants because the said agreement stripped the plaintiff of its assets and required the plaintiff to lease back and pay for the very same assets that it once owned (see p 434H). Since the second defendant knew that the first defendant was a trustee of the company, the monies the second defendant had received from the first defendant pursuant to the agreement was deemed to be held by him as a constructive trustee. The advancement of payment by the first defendant on behalf of the plaintiff was in breach of trust and the receipt of the said sum was either actual or constructive knowledge of the breach, thus satisfying the two requirements to prove constructive trust (see p 438HI); Lian Keow Sdn Bhd v Chelliah Paramjothy & Anor [1988] 1 CLJ 57 followed.

13) GASING HEIGHTS SDN BHD v ALOYAH BTE ABD RAHMAN & ORS[1996] 3 MLJ 259 The defendants were residents of dwelling houses located in close proximity to Bukit Gasing, where a substantial portion of it was designated a green belt area. In September 1990, the defendants alerted Majlis Perbandaran Petaling Jaya ('the MPPJ') to some survey work in the area which was followed by a visit from MPPJ's town planner who gave a public assurance that development projects in the area would not be approved. Similar assurances were also given by political figures. In February 1991, the defendants suspected that some large scale development was being carried out in the area, not knowing that MPPJ had already approved the project on 10 December 1990. On 28 February 1991, some of the defendants wrote to the president of MPPJ protesting against the development. There was no response. On 18 April 1991, the residents' association wrote again to the president of MPPJ asking for details, plans

and documents. Again there was no reply. On 3 June 1991, the defendants applied by originating motion for leave to file an application for certiorari to quash the approval given by the MPPJ and for consequential relief. The developer was named as the second defendant. Leave was refused on the ground that it was filed out of time. The defendants appealed to the (then) Supreme Court. Meanwhile, the developer filed this action against all the defendants on 25 June 1991, claiming that: (i) the defendants had maliciously and/or without reasonable or probable cause filed the motion; (ii) the defendants with the intent to injure conspired and agreed together to file the motion in bad faith for no other purpose than to cause irresponsible damage to the developer; (iii) the defendants had abused the court process by perverting the same for their own collateral purpose with an ulterior motive to cause damage to the developer by the bad publicity; (iv) the motion was doomed to fail being more than six months after the date of the project approval; (v) the defendants had no locus standi to sue the MPPJ; and (vi) the developer had needlessly been added as a party. The relief claimed was a declaration that the motion was an abuse of process, an injunction to prevent the defendants from continuing with the motion, general and special damages and other relief. The defendants here filed an application to strike out the developer's claim based on O 18 r 19(1)(a), (b), (c) and (d). Held, striking out the developer's action with costs:

In determining whether a statement of claim discloses a reasonable cause of action, or itself constitutes an abuse of process, the state of affairs to which the court must have regard is that which prevailed on 25 June 1991. On that day, the motion was very far from being heard. By filing this action, the developer had literally sought to pre-empt the defendants from proceeding further (see p 267C). Since no particulars were given of the malice and the lack of reasonable and probable cause, the plea of malicious prosecution should be struck out on this ground alone (see p 268D). The claim for malicious prosecution was also premature as the appeal had not concluded the fate of the motion (see p 268E-F);Balbhaddar Singh v Badri Shah (1926) AIR 46; Balbhaddar Singh v Badri Shah (1926) AIR 46; B Madan Mohan Singh v B Ram Sunder Singh (1930) AIR 326 and Taib bin Awang v Mohamed bin Abdullah & Ors [1983] 2 MLJ 413 followed. Apart from the bare assertion of conspiracy based on the joint filing of the action no particulars of any kind were alleged against these six defendants to show they were linked to the misdemeanours alleged against the fifth defendant. Just as fraud must be pleaded with great particularity, so also all the constituent ingredients going to make up the conspiracy must be pleaded. On this ground alone, the claim for conspiracy failed (see p 269B). Although the relief sought in the motion was primarily aimed at the MPPJ with a view to getting its approval quashed, the developer was rightly joined because it was a party whose interests could be affected (see p 269C); Tradium Sdn Bhd v Zain Azahari bin Zainal Abidin & Anor [1995] 1 MLJ 668 followed. To establish the tort of conspiracy to injure the developer by lawful means, it has to be pleaded that in filing the motion the predominant purpose of the defendants as

conspirators was to injure the developer. Since the predominant purpose of the defendants in filing the motion was to further and protect legitimate interests of their own, the allegation of a parallel intention of injuring the developer could not be sustained unless the defendants used unlawful means. On both counts, the allegation of conspiracy failed against all the defendants because it was not alleged that the predominant purpose of the defendants was to injure the developer nor was it alleged that unlawful means were used (see p 269E-F). A litigant who is a party to civil proceedings who claims that those proceedings are an abuse of process must take objection in those very proceedings under O 18 r 19(1)(d). The filing of a collateral action as was done in this case was itself an abuse of process which must result as happened here in its being struck out (see p 275E).

14) Shell (M) Trading Sdn Bhd v Tan Bee Leh @ Tan Yue Khoen & Ors[2013] 8 MLJ 533 The defendant granted a lease to the plaintiff a parcel of land for a period of 15 years for the purpose of the erection of the plaintiff's petrol station. Pursuant to retailer license agreement ('RELA'), the first defendant operated the plaintiff's petrol station business on the said land. Pursuant to the RELA, the plaintiff erected a petrol station on the land and provided petroleum products and equipments for the first defendant's petrol station business. All such buildings, plant and appliances were to remain the property of the plaintiff. Upon expiry of the 15 years, the plaintiff had in accordance with the lease agreement given the first defendant notice of the plaintiff's intention to extend the lease for a further 15 years. The first defendant however denied plaintiff's exercise of the option for the renewal of the lease and demanded the removal of plaintiff's equipments from the said land. The plaintiff was subsequently informed that the said land together with plaintiff's equipment had been sold to the second and third defendants. The plaintiff accordingly terminated the RELA with the first defendant, ceased supply of the petroleum products and demanded the second and third defendants to cease operation at the petrol station. The plaintiff claimed that the second and third defendants had detained and converted plaintiff's station and equipments for their own use and had failed to deliver the same to the plaintiff. The plaintiff commenced this suit claiming, inter alia, that the defendants had wrongfully and maliciously conspired to perpetrate fraud on the plaintiff in the disposal of the land which had entitled the defendants to legal possession of the land and, enabled the defendants' continued operation of the plaintiff's petrol station under the plaintiff's name. The plaintiff sought damages for conspiracy. Held, dismissing the plaintiff's claim for damages for conspiracy: (1) There was in existence a valid, binding and enforceable agreement for the lease renewal for a further period of 15 years. In the light of the existence of plaintiff's valid renewed lease and plaintiff's lawful occupation of the land, the first defendant's disposal of the land to the new proprietors during the subsistence of the lease period was wrongful and constituted a clear breach of the terms and conditions of the renewed lease (see paras 1718).

(2) In an action premised on a tort of conspiracy, it is incumbent on the plaintiff to prove the existence of the defendants' conspiratorial agreement to intentionally injure and cause economic loss to the plaintiff (see para 23); Mrs Kok Wee Kiat v Kuala Lumpur Stock Exchange Berhad & Ors [1979] 1 MLJ 71; SCK Group & Anor v Sunny Liew Siew Pang & Anor [2011] 4 MLJ 393; Double Acres Sdn Bhd v Tiarasetia Sdn Bhd [2000] 7 CLJ 550 and MGG Pillai v Tan Sri Dato Vincent Tan Chee Yioun & Other Appeals [1995] 2 MLJ 493 referred. (3) A civil proceeding involving an allegation of fraud mandates a higher degree of standard of proof, requiring plaintiff to prove plaintiff's allegation beyond reasonable doubt and not on a balance of probabilities (see para 27); CGU Insurance Bhd v Asean Security Paper Mills Sdn Bhd [2006] 3 MLJ 1; Chong Song @ Chong Sum & Anor v Uma Devi a/p V Kandiah [2011] 2 MLJ 585 and Saminathan v Pappa [1981] 1 MLJ 121 referred. (4) The plaintiff failed to establish that the first defendant as part of the parties' conspiratorial plan had wrongfully disposed the leased land to facilitate the second and third defendants' wrongful continued operation of plaintiff's petrol station. The plaintiff failed to prove to the required degree of proof the existence of defendants' conspiratorial agreement to cause loss and to deprive plaintiff's rightful entitlement to the proceeds from plaintiff's petrol station. There was insufficient evidence from which inference of defendants' conspiracy could be conclusively determined to the required degree of proof (see para 32). 15) Magna Prima Bhd & Ors v Top Green Entity Sdn Bhd & Ors[2013] 8 MLJ The first plaintiff was a public listed company. One Yap Soon Huat owned a substantial block of shares ('the FHH block') in the first plaintiff which he proposed to sell to certain parties ('the purchasers'). The second and third defendants represented part of the said purchasers. The first plaintiff was to undertake a proposed corporate exercise which would result in sale proceeds amounting to RM22,100,000 to the plaintiffs. The acquisition of the said FHH block was subject to certain conditions, inter alia, that the second and third plaintiffs must each open a bank account ('the plaintiffs' accounts') at the BCBB Jalan Meru Branch, Klang ('the 11th defendant') for the purpose of receiving the RM22,100,000. The second and third plaintiffs opened the plaintiffs' accounts at the 11th defendant bank on 15 September 2000. Sometime in mid-September 2000, Different Response Sdn Bhd ('DR') and Different Pride Sdn Bhd ('DP') opened a current account with the 11th defendant. The 12th defendant was the head of customer services and attended to the opening of the accounts. On 28 September 2000, the first defendant opened a current account where the third defendant was made the sole signatory. Subsequently, the entire FHH block was successfully sold. The 11th defendant was given a new set of letter of instructions whereby the second and third defendant, who were neither the directors nor shareholders of DP and DR, varied the previous instruction as follows: (i) DP instructed the 11th defendant to transfer the RM12m to the second plaintiff's account; and (ii) DR instructed the 11th defendant to transfer RM4,584,300 and RM5,415,700 to the second plaintiff's account. On 14 October 2000 the second and third defendants changed the signatories of the plaintiffs' accounts. On 16 October 2000, the entire sale proceeds amounting

to RM22.1m were paid into the plaintiffs' accounts. The third defendant became not only the sole signatory to the first defendant's account, but also to the second plaintiff's account and the third plaintiff's account. The third defendant then withdrew a sum of RM22.1m from the plaintiffs' account and paid to the first defendant's account without the plaintiffs' knowledge or authority within a space of one and half hours. The plaintiffs' claims against the 12th defendant were as follows: (i) that the 12th defendant breached his duty of care owed to the plaintiffs; (ii) that the 12th defendant assisted the third defendant in the breach of its fiduciary duties as a director of the second and third plaintiffs; and/or (iii) that the 12th defendant together with the other defendants were involved in the fraud and/or conspire to defraud the plaintiffs with the sole purpose of removing by illegal means the sum of RM 22.1m. The issues which arose for the court's determination were whether the 12th defendant was liable to the plaintiffs for: (i) negligence in performing his duties as the 11th defendant's bank officer to the plaintiffs' detriment; (ii) dishonestly assisting the third defendant in the breach of the third defendant's fiduciary duties owed to the second and third plaintiffs; (iii) fraud; and (iv) conspiring with the first, second, third, fourth, fifth, ninth and 15th defendants to defraud the plaintiffs. Held, allowing the claim with costs:

The customer service policy ('CSP') issued by the 11th defendant must be adhered to by all bank officers and serves as a guideline to all bank officers as to the documents required when processing the opening of a current account. According to the CSP, a current account may only be opened with the authorisation of the head of customer service or the branch manager. The officer attending to the customer must ensure that the requirements listed in the CSP are duly complied with. It was clearly stated under cl 4.2.5 of the CSP that there must be an introducer and that the branch must check/verify the details of the prospective customer (see paras 3436). The current account was opened without any introducer. The 12th defendant agreed that he had breached cll 4.2.4 and 4.2.5 of the CSP. As to the requirements of a minimum deposit of RM1,000 for DR and DP to open the current accounts, the 12th defendant said in evidence that he had sighted the said documents showing that such amount was deposited. However, no documentary proof was tendered to support this. There were also no directors' resolutions from DR and DP as to the opening of the current account. Despite the aforesaid guidelines, there was no resolution, no introducer and no evidence that the minimum sum of RM1,000 was deposited and also no specimen signature cards for DR and first defendant but the 12th defendant proceeded to approve the opening of the aforesaid current accounts (see paras 3740). The CSP was clearly not adhered to by the 12th defendant and by failing to do so, he had acted negligently as a bank officer. It is stated in the CSP that irrespective of whether an introducer is required or not, branches must exercise great care when opening new accounts. It was clear that the processing, approval and opening of the current accounts was hastily done and this fact was not denied by the 12th defendant (see paras 4142). The 12th defendant did not call the second and third plaintiffs to alert that the second and third defendants had presented pre-dated resolutions to the bank. The 12th

defendant knew that when the second and third plaintiffs opened current accounts with the 11th defendant, both companies had expressly required two signatories for the operation of the accounts. There were no documents given to the 12th defendant that the second and third defendants were taking over the second and third plaintiffs. When he became aware of the change in the companies' authorised signatories, he did not take any steps to alert the plaintiffs (see paras 4142). The 12th defendant did not counter-check with the plaintiffs when he received the new set of instructions. He was not suspicious that such a large amount of money was being transferred. As a bank officer, he must act prudently and exercise great skill and care. The 12th defendant was negligent in handling and approving the transactions which ultimately resulted in the sum of RM22.1m being credited into the accounts within a couple of hours without any proper formal documentation (see paras 45 & 47). For conspiracy to take place, there must also be an unlawful object, or, if not in itself unlawful, it must be brought about by unlawful means. In order to succeed in a claim based on the tort of conspiracy, the plaintiffs must establish: (i) an agreement between two or more persons; (ii) for the purpose of injuring the plaintiffs; and (iii) the execution of that agreement resulted in damages to the plaintiffs. The evidence adduced was insufficient to constitute an act of conspiracy. This was simply a case of a senior bank officer who was clearly negligent in discharging his duties (see paras 4849).

16) Dr Ismail bin Abdul Hamid & Anor v Dr Mohd Khairy bin Yakub & Ors[2013] 3 MLJ 286 The first plaintiff was a cardio-thoracic surgeon while his wife, the second plaintiff, was an anaesthetist. At the material time, they formed a company called Andalas Medical Centre Sdn Bhd which operated as Andalas Medical Centre at Andalas, Klang ('AMC') with the plaintiffs as the directors of the said company. The first and third defendants are also medical doctors attached to the Ministry of Health ('MOH'). They were the secretary and assistant secretary of the fourth defendant, respectively. The fourth defendant ie Malaysian Medical Council ('MMC') is a regulatory body established pursuant to the Medical Act 1971 ('Act'). The second defendant, an ex-radiographer from the General Hospital Kuala Lumpur, was an officer in the licensing division of the MOH and at all material time was acting as the deputy director of the Engineering Division of MOH. The plaintiffs alleged that the first, second and third defendants had collectively conspired to injure the plaintiffs by manipulating the fourth defendant to oust them from the medical profession as doctors. According to the pleadings and facts as enumerated by the plaintiffs, at that point in time when University Institute Technology Mara ('UITM') had set up a nursing school, AMC gave out scholarships to 13 of its nurses. Vide an agreement between the plaintiffs and UITM, UITM was to recruit medical specialists from India whose salaries would be paid by the plaintiffs which would also be responsible in the purchase of all necessary equipments. The recruited specialists then arrived and were helping the ITM students and setting up their various departments at AMC. The plaintiffs claimed that the problems started due to pressure from MMC through the first defendant. The first defendant had alleged that the agreement between UITM and AMC could not be allowed to continue. Ultimately, the said program had to be called off and the doctors repatriated. As a result of this, the plaintiff had suffered tremendous financial loss and hardship and it was at this time that Bank Pembangunan

who financed the setting up of AMC sent receivers and managers to take over AMC. Due to the receivers and managers inefficiency in managing a hospital in receivership, the officers from MOH raided AMC's Radiology Department. The first plaintiff was then charged at the Klang Sessions Court for operating a radiology machine without a license. He was however found not guilty, acquitted and discharged. Apart from these, there were three complaints against the plaintiffs, each of the complaints alleging misconduct leading to three separate inquiries conducted against them by MMC. The first complaint against the two plaintiffs had been withdrawn. The other two inquiries by the Preliminary Investigation Committee ('PIC') related to the second and third complaints are still ongoing and pending. As a result of all these, the plaintiffs had suffered losses and hence, sought damages and also an injunction against MMC from continuing the disciplinary inquiries until the disposal of the action. The following issues were raised for the determination of this court namely, (i) whether there was a conspiracy by the defendants to injure the profession of the plaintiffs; (ii) whether the plaintiffs had pleaded sufficiently in a case of this nature; (iii) whether the court should allow the plaintiffs' claim that the entire proceeding before the PIC of the fourth defendant pertaining to the three complaints against them be declared null and void for failure to adhere to the Medical Regulations 1974 ('Regulations'). Held, dismissing the plaintiffs' claim with no order as to costs:

The fourth defendant is empowered by the Act and the Regulations to commence disciplinary inquiries into complaints made against any medical practitioner registered with it. It is a statutory body created under the Act and has its own duties and functions, which do not involve the MOH's decision to raid the centre. There was no proof to show that the MOH had consulted the fourth defendant before raiding the centre. There was nothing to show that MOH had acted in concert with MMC when they raided AMC or when the first plaintiff was charged at the Klang Court (see para 17). The plaintiffs had failed to provide direct evidence sufficient to prove an agreement by the defendants to conspire to injure them. There was no factual basis to support the inference that there was any agreement in any form between the defendants or any two of them with the common intention of unlawfully interfering with and causing damage to the plaintiffs medical practice, whether by way of inquiries, the raid or even the Klang Court matter. Thus, the plaintiffs had failed to discharge their burden of proving the case (see para 20). On perusal of the pleadings, the plaintiffs had failed to plead sufficiently and with clarity the particular facts of the agreement by the defendants to conspire to injure the plaintiffs (see para 22). It is specifically provided for under Part IV of the Act and the Regulations that the fourth defendant is empowered to commence disciplinary inquiries into complaints made against any medical practitioner registered with MMC. Section 31 of the same Act provides a statutory guarantee of the right for the aggrieved medical practitioner to appeal to the High Court against the said decision of MMC in the exercise of its disciplinary jurisdiction. In this aspect, it was premature at this juncture for the plaintiffs to ask for such a declaration from the court (see para 23).

17) JAKS-KDEB Consortium Sdn Bhd v Perbadanan Urus Air Selangor Bhd & Ors[2012] 3 MLJ 324 On 15 Mac 2002 the first defendant and the third defendant entered into a corporatisation agreement. By vesting order (Sel PU 35) dated 26 September 2003 the Menteri Besar of Selangor appointed 15 Mac 2002 as the vesting date where all properties, rights and liabilities of the third defendant in respect of the supply and distribution of treated water supply services were transferred to and vested in the first defendant. The first defendant shareholding were acquired by the second defendant by an agreement dated 8 December 2004. On 15 December 2004 the second defendant, the third defendant and the Federal Government executed a concession agreement. The second defendant was granted a concession of 30 years to supply and distribute treated water in the Selangor and the Federal Territories of Kuala Lumpur and Putrajaya. On 10 May 2006 the second vesting order was issued vesting all rights and liabilities of the third defendant to the first defendant. The plaintiff contended that the first defendant had in breach of its obligations under the supply agreement,unilaterally ceased to purchase from the plaintiff the pipes and fittings for all projects in respect of water distribution and/or supply services carried out in the State of Selangor including the Federal Territory of Kuala Lumpur and Putrajaya. The plaintiff also claimed that the second defendant with the full knowledge of the first defendant's obligations under the said supply agreement used its position of control over the first defendant to prevent the first defendant from fulfilling its obligations under the supply agreement by causing the first defendant to cease purchasing from the plaintiff the pipes and fittings. It was further contended that the second defendant negligently and/or fully conspired and combined with the first defendant, with the sole or predominant intention of injuring the plaintiff and/or causing loss to the plaintiff by ceasing to purchase the pipes and fittings. Hence the plaintiff claimed for the alleged losses and damages as a result thereof. The defendants submitted that the supply contract was a long term contract and was not an exclusive contract. Hence, it was contended that the third defendant retained the discretion to decide whether or not to purchase the pipes and fittings from the plaintiff. Held, dismissing the plaintiff's claim with cost:

The terms laid out in the agreement had clearly and unequivocally reflected the intention of the Selangor State Government. The products were to be purchased on a project to project basis. The State Government will not be tied to one supplier only and procurement of such products may be made from other sources. The parties were 'ad idem' that exclusivity was never a condition to be incorporated into the agreement. Since the supply agreement was entered into by the parties was devoid of any intention to grant any form of exclusivity to one party, the first defendant was therefore not in breach of the supply agreement by failing to order or purchase the pipes and fittings from the plaintiff (see paras 25, 31 & 39). The plaintiff failed to adduce any evidence to show that there was direct or indirect interference coupled with unlawful means or that the first and/or second defendant had the intent to interfere with the supply agreement (see para 41).

In the tortious act of conspiracy, there must be an agreement or combination of two or more with the common intention to effect an unlawful purpose or to do a lawful act by unlawful means which will result in damages to the plaintiff. Where the act is lawful, the predominant purpose must be to cause loss to the plaintiff for there to be conspiracy. If the predominant purpose is for the self interest or protection of the defendants, it is not an unlawful purpose and there is no conspiracy, even if the plaintiff incidentally suffers loss (see paras 4243); Yap JH v Tan Sri Loh Boon Siew & Ors [1991] 4 CLJ (Rep) 243 referred. No evidence was adduced by the plaintiff to show that there was any form of agreement between the second defendant with any third parties with the dominant purpose of damaging and actually damaging the plaintiff. No evidence was adduced by the plaintiff to prove an allegation of conspiracy. The plaintiff failed to establish that the concession agreement was for the purpose of injuring the plaintiff and the execution of that agreement resulted in damage to the plaintiff (see paras 5253). Pursuant to the Water Supply (Successor Company) Enactment 2001 (Selangor) ('Enactment') and the issuance of a vesting order by the Menteri Besar of Selangor, the third defendant had duly transferred all its rights and liabilities in respect of water supply services, including those arising under the supply agreement. These acts by themselves were not unlawful neither were they brought by unlawful means. These acts were executed under existing and valid Enactments and the vesting orders were properly issued in accordance with the laws and regulations at all material times. The second defendant was therefore neither negligent nor had willfully conspired and/or combined with the first defendant with the predominant or sole intention of injuring and/or causing loss to the plaintiff by ceasing to purchase or cause to be purchased the plaintiff s products as contended by the plaintiff (see paras 5557). Both of the vesting orders were valid as it was made pursuant to s 3(1) of the Enactment which give powers to the Menteri Besar to vest all rights and liabilities of the state to a substitute company. Therefore, the third defendant had lawfully vested all its rights and/or obligations of the supply agreement between the plaintiff and the third defendant to the second defendant (see para 69).

18) Renault SA v Inokom Corp Sdn Bhd & Anor and other appeals[2010] 5 MLJ 394 The first plaintiff/respondent, Inokom and the second plaintiff/respondent, Quasar Carriage Sdn Bhd ('Quasar') issued a writ claiming damages against the first, second and third defendants/appellants, namely, Renault SA ('Renault'), Tan Chong Motor Holdings Bhd ('Tan Chong') and TC Euro Cars Sdn Bhd ('TC Euro') for breach of contract, breach of fiduciary duties, fraudulent misrepresentation/deceit by Tan Chong to Inokom and Quasar to reject the investment for the Kangoo project and for Renault conspiring with Tan Chong and TC Euro to injure Inokom and Quasar. Renault, Inokom and Quasar had entered into the master agreement with terms and conditions to govern a co-operation on the import and distribution of Renault built up vehicles in Malaysia by Quasar ('Renault project'); and the manufacture, assembly, sale and

distribution of a Malaysian national light commercial vehicle ('Inokom project'). Renault also entered into a joint venture agreement with the Berjaya Group Bhd and several other parties, whereupon Renault subscribed to be a minority shareholder in Inokom and agreed that no party shall have any fiduciary obligations to the other. By summons in chambers dated 30 July 2003 (encl 11) Renault applied to stay all proceedings in the suit pending reference of the disputes to arbitration pursuant to s 6 of the Arbitration Act 1952 ('1952 Act'). The learned High Court judge dismissed the application. Renault appealed against this decision. By summonses in chambers dated 31 July 2003 (encl 13) and 1 August 2003 (encl 15), Tan Chong and TC Euro respectively applied to strike out the statement of claim under O 18 r 19 (1)(a) and/or (b) and/or (c) of the Rules of the High Court 1980and/or the inherent jurisdiction of the High Court. The application was dismissed by the learned High Court judge. Tan Chong and TC Euro respectively appealed against these decisions. The three appeals were heard together. Held, allowing all the three appeals with costs:

The dispute between the parties clearly arose from or in connection with the performance or interpretation of the master agreement relating to: (a) its non-renewal; and (b) in respect of the allegation of breach of fiduciary duties (see para 13). Whether there was a breach of the master agreement was a dispute falling squarely within the ambit of the arbitration agreement found in Article 11 of the master agreement. The fact that Tan Chong and TC Euro had been named as alleged co-conspirators did not change the fact that a mechanism for resolving disputes between Renault, Inokom and Quasar has been agreed upon. Therefore, the mechanism should be rightly invoked and the disputes resolved by arbitration and not by litigation in court. A devious attempt to circumvent Article 11, by instituting an action against Renault jointly with parties not subject to the arbitration clause, should not be encouraged (see paras 1516). The law governing the arbitration agreement under Article 11 of the master agreement was the Arbitration Act 2005 ('2005 Act'). The 1952 Act no longer had any application if the arbitration commenced pursuant to the master agreement anytime thereafter, because s 51(2) of the 2005 Act provides that it shall be applicable to all proceedings commenced on or after 15 March 2006 (see para 21). The provision on stay of court proceedings pending arbitration is found in s 10 of the 2005 Act. The requirement to stay is mandatory unless the court finds that: (a) the arbitration agreement is null and void,inoperative or incapable of being performed; or (b) there is no dispute between the parties with regard to the matters to be referred (see para 22). In regard to the tort of conspiracy, the following need to be satisfied at this interlocutory stage: an agreement between two or more persons (ie an agreement between Tan Chong and others); an agreement for the purpose of injuring Inokom and Quasar; that acts done in execution of that agreement resulted in damage to Inokom and Quasar; damage is an essential element and where damage is not pleaded the statement of claim may be struck out. 'Agreement' is not limited to a signed and sealed agreement but any informal agreement, including a combination of efforts of the alleged coconspirators. It is trite law that the agreement to injure must come first (in other words

the agreement should have crystallised), before the alleged unlawful acts are done in execution or pursuant to the agreement (see paras 3234). There could not in law and in fact conceivably have been an agreement or combination or conspiracy between Renault and Tan Chong to injure Inokom and Quasar when the alleged representation was pleaded to have been made in 2000 and the allegedconspiracy was pleaded to have occurred in 2001. There was no cause of action in the tort of conspiracy against Tan Chong (see paras 38 & 40). There was no allegation of any overt acts carried out by TC Euro in the pleadings and by necessary implication TC Euro had not carried out any overt acts. Besides the absence of allegations of overt acts on the part of TC Euro the statement of claim also failed to plead the agreement between the defendants to conspire and state precisely what was the purpose or what were the objects of the alleged conspiracy. The statement of claim also failed 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. There was no cause of action in the tort of conspiracy as against TC Euro. The statement of claim was vexatious and frivolous. Just as fraud must be pleaded with great particularity, so must the constituent ingredients of the alleged conspiracy by TC Euro be pleaded (see paras 4243 & 48)

19) Lembaga Kemajuan Tanah Persekutuan (FELDA) & Anor v Awang Soh bin Mamat & Ors[2009] 4 MLJ 610 The High Court proceeded in the absence of the defendants and/or their counsel and heard evidence in support of the plaintiffs' claim. After deliberation, the High Court allowed the plaintiffs' claim. The plaintiffs were awarded general damages, exemplary damages, interest and costs. The defendants' counsel applied the very next day to set aside the judgment under O 35 r 1 of the Rules of the High Court 1980, which application was heard and dismissed by the High Court. The defendants subsequently appealed against the decision of the High Court of 13 January 2008 ('the decision appeal') and against the decision of the High Court dismissing their application to set aside the judgment ('the JID appeal'). The defendants appealed to the Court of Appeal. The Court of Appeal refused the defendants' application to consolidate both appeals, and instead ordered the appeals be heard one after another beginning with the JID appeal. At the commencement of the appeal, the plaintiffs' counsel raised a preliminary objection and prayed that the defendants' decision appeal be struck out. The plaintiffs' counsel contended that the defendants were estopped from pursuing their decision appeal since they had elected to pursue the JID appeal. Held, dismissing the appeal with costs:

(per James Foong FCJ) For estoppel by election to apply, there must first be an election made by one party and responded by the other who was encouraged by this election to adopt or persevere a line of conduct which he otherwise would have abandoned or modified, or he has changed his tactics which he would not have adopted if not for the election. In short, there must be a positive act of election corresponded by a reaction from the other side to the act. However, in the instant case there was no

evidence that the defendants had made any election in the first place. They had proceeded with the two appeals simultaneously. There was also no evidence that the plaintiffs were encouraged by any election made by the defendants to alter their conduct of the case. The plaintiffs in fact were prepared to take on the defendants in both the appeals. This principle of estoppel, being equitable in nature should only be used where justice dictates and should only be applied according to the facts and circumstances of each particular case and its operation dependent upon the conduct of the parties (see paras 10 & 16); Annie Quah Lay Nah v Syed Jafer Properties Sdn Bhd & Ors and another appeal [2007] 1 MLJ 225; Meng Leong Development Pte Ltd v Jip Hong Trading Co Pte Ltd [1985] 1 MLJ 7and Lai Yoke Ngan & Anor v Chin Teck Kwee & Anor [1997] 2 MLJ 565 referred; Yogananthy a/l AS Thambaiya lwn Idris Osman[2006] 2 MLJ 101 distinguished. (per James Foong FCJ) In setting aside a judgment in default due to non-appearance by a party, a distinction ought to be drawn between an application where the judgment was obtained without a trial having proceeded, and an application where the judgment was obtained after a trial. Where the judgment is entered after trial, different rules will apply. The factors to be considered when dealing with such an application (default judgment after trial) are as identified in the English case of Shocked & Anor v Goldschmidt & Ors [1998] 1 All ER 375, as applied locally in Abdul Rafar bin Maimunni & Anor v HM Latiff bin KM Haneefa [2008] 1 LNS 157 and Ng Chek Kiam & Anor (Seng Heng Wholesale Fruit Dealer) v Best Fruits Sdn Bhd [2006] 1 LNS 267 (see paras 17 18); Evans v Bartlam[1937] AC 473 and Burns v Kondel [1971] 1 Lloyd's Rep 444 distinguished; Shocked & Anor v Goldschmidt & Ors [1998] 1 All ER 3752followed; Abdul Rafar bin Maimunni & Anor v HM Latiff bin KM Haneefa [2008] 1 LNS 157 and Ng Chek Kiam & Anor (Seng Heng Wholesale Fruit Dealer) v Best Fruits Sdn Bhd [2006] 1 LNS 267 referred. (per James Foong FCJ) The defendants' absence was the predominant consideration. Although the defendants sought to lay the blame on their solicitor's previous employee who had allegedly failed to diarise the hearing date, an employer is responsible for the action of his employee, and thus the conduct of the defendants' solicitors also bound the defendants. Further, the failure to diarise a hearing date is not an excuse that has been tolerated by the courts. The defendants' solicitors indifference or lack of interest in managing their firm properly by failing to devise a system to monitor and check whether the duties or instructions given to its employees were carried out, would amount to a deliberate act or defiance of a court order if such order were given to its employee and not complied with. In the instant case, the plaintiffs had also adduced unrebutted evidence, that they had sent a letter of reminder to the defendants' counsel concerning the hearing date (see paras 2023); Mohd Yusof Mohamad v Electrolux Home Centres Sdn Bhd [1999] 2 CLJ 866; Asia Commercial Finance (M) Bhd v Pasadena Properties Development & Ors [1991] 1 MLJ 111) and Lim Soh Wah & Anor v Wong Sin Chong & Anor and another appeal [2001] 2 CLJ 344 referred. (per James Foong FCJ) In the instant case, the plaintiffs' causes of action were based on fraud and conspiracy to defraud. Concerning the fraud, the plaintiffs had claimed

against the defendants jointly and/or severally. Thus, each of the defendants was individually liable to the plaintiffs. There was no question of the first and third defendants being released by the plaintiffs on account of the death of the second defendant. In the cause of action for conspiracy, all the defendants were joint tortfeasors. Even when one of them died, the action would subsist against the surviving tortfeasors without the need to substitute the deceased defendant. In short, the action would continue against the remaining tortfeasors. The first and third defendants thus remained liable to the plaintiffs and had not been discharged. Further, there was no record that the plaintiffs had withdrawn their claim against the deceased second defendant. It was merely the High Court's own discretion to refuse awarding any damages against the second defendant (see paras 2930).

(per James Foong FCJ) In a claim based on fraud and conspiracy to defraud, the plaintiffs should be entitled to the loss suffered as the result of the deprivation of their income or profit caused by the wrong committed by the defendants, after taking into account the foreseeability factor. In the instant case, the plaintiffs' witness had given credible and uncontradicted evidence on how the plaintiffs' losses were arrived at and this had been accepted by the High Court. The High Court judge had applied the correct principles in assessing general damages, which was also substantiated by cogent evidence (see paras 3637). (per James Foong FCJ) An award of exemplary damages ought to be moderate. The resources and conduct of the parties, quantum of the compensatory award, and gravity of the wrong are also factors to be considered. In the instant case, considering the circumstances and all other relevant factors the trial judge's award of exemplary damages was justified (see para 38). In the instant case, the High Court had declared that even if proof beyond reasonable doubt was applied, its decision would still be the same. This was a clear indication that the High Court had considered and applied the higher standard of proof in concluding that the defendants were liable to the plaintiffs (see para 43). (per James Foong FCJ) The documents filed by the plaintiffs in their additional bundle of documents were admitted by the court when they were tendered by the plaintiffs during the trial. Once admitted the documents were considered evidence. As for the oral evidence, such evidence was properly admitted by the court (see para 45). (per James Foong FCJ) Although the defendants had taken prompt and immediate action to set aside the default judgment, this paled in significance when considered in the light of the very weak excuse given for the defendants' absence in court coupled with no real prospect of success in their defence. Further, it is public policy that there should be finality in an action rather than having to engage the court to conduct two trials instead of one (see para 46). (per Abdul Malik Ishak JCA dissenting in part) The plaintiffs' preliminary objection ought to be unanimously dismissed forthwith. There were no principles of law that required the defendants to be put to an election of their rights. Both the defendants'

appeals were in respect of different matters, issues and questions of law. Both decisions of the High Court were also appealable under ss 3and 68 of the Courts of Judicature Act 1964 (see paras 60, 62, & 64). (per Abdul Malik Ishak JCA dissenting in part) When one party fails to appear, the High Court may proceed with the trial in the absence of that party. However, the party which appears before the court would have to prove its case on any issue for which it bore the burden of proof. In the instant case, the burden of proof was on the plaintiffs to prove their case notwithstanding the absence of the defendants (see paras 7273); Liew Geok Lan (f) v John Loh [1993] 3 CLJ 158; Barker v Furlong [1891] 2 Ch 172 and Shaharuddin bin Abdul Rahman v Satisah Ismail Sdn Bhd [1982] 2 MLJ 79 referred. (per Abdul Malik Ishak JCA dissenting in part) In an application to set aside a judgment in default of appearance by the defendant after trial, different considerations will apply compared to an application to set aside such default judgment before trial. Although the court has an unfettered discretion to grant or refuse an application to set aside a judgment in default of appearance after a trial, there must be some material on which the court can exercise its discretion in favour of the applicant. The predominant consideration is not whether there is a defence on the merits but rather the reason why the defendant had absented itself. If the absence was deliberate and not due to accident or mistake, the court would be unlikely to allow a rehearing. Other relevant factors to be considered in such an application include: (i) the defendant's prospects of success in a retrial; (ii) the delay in applying to set aside the judgment; (iii) the conduct of the defendant; (iv) whether the successful party would be prejudiced by the judgment being set aside; and (v) the public interest in there being an end to litigation (see para 80); Shocked & Anor v Goldschmidt & Ors[1998] 1 All ER 372 and Buga Singh v Koh Bon Keo [1967] 1 MLJ 16 followed. (per Abdul Malik Ishak JCA dissenting in part) In the instant case, the defendants' solicitors' oversight of the trial date was a genuine mistake and not deliberate. The High Court judge had erred in law when he failed to accept the reasons for the absence of the defendants and their solicitors on the date of hearing. Their absence was not intentional or deliberate (see para 101). (per Abdul Malik Ishak JCA dissenting in part) The allegations of fraud, cheating and conspiracy against the first defendant hinged entirely on the actions of the second defendant deceased at the time of trial as the representative, agent or employee of the first defendant. With the demise of the second defendant it was doubtful whether the burden of proof of conspiracy, fraud and cheating had been adequately proved by the plaintiffs notwithstanding the absence of the defendants on the hearing date. With the second defendant's demise, the case against the first and third defendants could not be sustained. Further, as a joint tortfeasor, when the second defendant died, that was the end of the matter. The plaintiffs had also abandoned their claim against the second defendant. Thus, it was not possible for the High Court to decide the case against the defendants (see paras 105107, 112113). (per Abdul Malik Ishak JCA dissenting in part) The defendants had not delayed in applying to set aside the default judgment. They had acted promptly and timeously in filing their application (see para 114).

(per Abdul Malik Ishak JCA dissenting in part) The plaintiffs' claim was for damages and there were 354 plaintiffs in the instant case. Each one had to individually prove his or her claim before the High Court. There was no 'class action' suit in Malaysia. Neither was this action filed as a representative action. The High Court's decision was not based upon any cogent evidence, either oral or through documents (see para 116). (per Abdul Malik Ishak JCA dissenting in part) In the instant case, to allow the decision appeal and remit the case back to the High Court for retrial would not deprive the defendants their opportunity to defend the action whilst at the same time the plaintiffs would still have the opportunity to continue with their claim. To deprive the defendants the opportunity of defending the claim would likely lead to a miscarriage of justice in the instant case (see paras 117 & 119);Su Sh-Hsyu v Wee Yue Chew [2007] 3 SLR 673 followed. (per Abdul Malik Ishak JCA dissenting in part) In the instant case, there was an improper judicial appreciation of the evidence by the High Court judge. The High Court had failed to test the evidence of witnesses against the probabilities of the case since both parties were not in court to present their versions. The appellate court was thus free to reverse the findings of the trial court, which was plainly wrong in the instant case. The trial judge had misdirected himself and failed to judicially appreciate the evidence (see paras 120122).

20) Malaysia Discounts Bhd & Ors v Pesaka Astana (M) Sdn Bhd & Ors[2008] 6 MLJ 839 This civil suit involved the issuance by the first defendant (Pesaka) of RM140m worth of 'Al-Bai' Bithaman Ajil' bonds ('ABBA bonds') which were purchased by the ten plaintiffs, all of whom were financial institutions. The payment was duly made to the third defendant ('KAF Discounts') who then applied the payment to the account of the first defendant. The second defendant ('Mayban Trustees') was the trustee to the bondholders. The third defendant was the lead arranger, facility agent and issue agent. The bonds were redeemable at various dates in the total value of RM157,815,000 (a profit element of RM17,815,000). The obligation to make payment of the redemption sum was on the first defendant upon full maturity of the ABBA bond namely, on 30 September 2005. The primary relief sought by the plaintiffs was an order to recover monies owing to them due to the failure of the first defendant to redeem the first tranche of the ABBA bonds upon its maturity. Insofar as relief was concerned, the plaintiffs' claimed, inter alia, as against the first defendant, judgment of the sum of RM157,815,000 (now RM149,315,000) and as against the second defendant and third defendant, damages in the sum of RM149,315,000. The plaintiffs had entered into a consent judgment with the 10 other defendants in this civil suit on 7 July 2008. By the terms of the consent judgment, the first defendant agreed to pay the plaintiffs the sum of RM149,315,000 together with interest and costs. The consent judgment however, remained wholly unsatisfied although nearly one month had passed since the court recorded it. Following the above claim, the second defendant and third defendant raised a preliminary issue under O 14A of the Rules of the High Court 1980, contending that the plaintiffs, by entering into consent judgment with the ten other defendants,

could maintain their claim against them, and therefore the trial against them should not proceed. The second defendant had raised the following question to be determined by the court without full trial of the action: 'What is the consequence on the plaintiff's causes of actions and claims against the second defendant in these proceedings as a result of the consent judgment dated 7 of July 2008 that was made between the plaintiffs and the first, fourth, fifth, sixth to twelveth defendants?' Meanwhile, the third defendant raised the following questions to be determined by the court without full trial of the action: '(a) Assuming (and if it can be established) that KAF is in breach of its contractual obligations, as alleged in para 57 of the statement of claim, do the plaintiffs have a valid claim against KAF for damages other than nominal damages, given that the plaintiffs have entered into the consent judgment with all the defendants (except KAF and the second defendant)?; (b) Assuming (and if it can be established) that KAF is in breach of any duty of care towards the plaintiffs, as alleged in para 58 of the statement of claim, do the plaintiffs have a valid claim against KAF for damages other than nominal damages, given that the plaintiffs have entered into the aforesaid consent judgment?; and (c) On the plaintiffs' pleadings, and on the assumptions made in relation to questions (1) and (2) above, could KAF, in law, be liable jointly and severally with the first defendant and the second defendant for its breaches as alleged in paras 57 and 58 of the statement of claim.' Held, dismissing the preliminary objections with costs:

A consent judgment is to be interpreted in the same way as a contract. Thus, the usual principles of contractual construction apply in the instant case: the paramount consideration was to ascertain the intention of the parties to the consent judgment. Such intention was to be assessed objectively by the court, in particular by reviewing the language employed in the consent judgment. In this case, it was plain and obvious that the intention of the plaintiffs and the ten defendants who consented to the judgment was that the plaintiffs' case against second defendant and the third defendant remained unaffected, and should proceed to trial, as demonstrated by the express words in para 7 of the consent judgment (see paras 41 & 46). From the perspective of a breach of contract cause of action, if it is a case of successive contract-breakers, consent judgment with one contract-breaker has no effect on another contract-breaker. The breach of contract cause of action was pleaded against first, second and third defendants. All the three defendants were in breach of their individual obligations under the numerous interlinked but separate bond contracts. In law, the said three defendants were known as 'successive contract-breakers' (see paras 5556). It is an established legal principle that if two or more several tortfeasors are sued, settlement with one tortfeaser does not release the others. It immediately become clear that the torts committed by the second and third defendants were several in nature: they were separate torts committed independently by each of them at different points of time, and not jointly. In other words, the plaintiffs did not allege collusion or conspiracy on the part of the second and third defendants (see paras 59 & 62). Based on the above considerations, the answers to all the three questions posed by the third defendant should be in the affirmative. While, the answer to the sole question posed by the second defendant was that there was no consequence on the plaintiffs'

action and claims against the second defendant in these proceedings as a result of the consent judgment that was made between the plaintiffs and the other defendants (see paras 20, 39 & 66). 21) Yap Ke Huat & Ors v Pembangunan Warisan Murni Sejahtera Sdn Bhd & Anor[2008] 5 MLJ 112 The plaintiffs instituted the present suit against the first defendant, a company, and the second to sixth defendants, the directors of the first defendant. The plaintiffs' claim against the defendants was premised upon, inter alia, breach of contract, conspiracy, breach of their duties as fiduciaries and/or constructive trustees to the plaintiffs and breach of trust. The writ and statement of claim were served on all the defendants by way of prepaid AR registered post. The fourth defendant accepted the service on behalf of the second to sixth defendants and the AR registered post acknowledgement card for the service on the sixth defendant was not returned by the post office. As only the first defendant had entered memorandum of appearance, the plaintiffs entered judgment in default against the second to sixth defendants. The second to sixth defendants sought to set aside the judgment in default on the grounds that the fourth defendant had received the writ and statement of claim meant for all the defendants but did not inform the chairman of the first defendant and that they believed that the solicitor acting for the first defendant would automatically represent them. However, only two affidavits, by the second and fourth defendants respectively, were filed to support the application. The application was dismissed by the High Court and hence this appeal. During the hearing of the appeal, the second to sixth defendants submitted that the judgment in default is void ex debito justitiae for failing to comply with O 13 r 6(1) of the Rules of the High Court 1980 ('RHC'). Held, dismissing the appeal with costs:

Once the writ and statement of claim are sent by AR registered post it is prima facie proof of service unless the defendant is able to rebut it. On the facts, it was clear from the affidavit of the second defendant that he had the knowledge that the writ and statement of claim were served on the first defendant, of which he was a director, and he had even instructed the solicitors to act for the first defendant. It was also clear from the affidavit of the fourth defendant that the second defendant had the knowledge that the writ and statement of claim were served on him. Thus, the second defendant had not rebutted the presumption that the writ and statement of claim were served on him (see paras 2122). Further, the claim against the second and the other defendant was one of conspiracy, breach of fiduciary duty as well as breach of trust which were matters beyond the bounds of the general protection offered to a director of a company. These were personal claims against the second defendant and he had not disclosed a defence on merit that ought to be tried. In any event, the agreements between the plaintiffs and the first defendant merely contained terms of a transaction between the parties and they did not exempt the defendant from personal acts alleged to be committed by him (see para 24).

The fourth defendant's excuse that he was under the impression that the second defendant would engage counsel to represent him and the rest of the defendants was not a reasonable ground to warrant a finding that the judgment in default against him was irregular. Further, the claim against the fourth defendant was over and above the exemption of a director from liability and debts of a company. The claim was also a personal one, for the events that had occurred before he relinquished his role as a director of the first defendant. (see paras 2728). The failure by the third and fifth defendants to file an affidavit to support the application rendered the judgment in default, a regular judgment and therefore their application to set it aside must fail. Whereas, the fact that the prepaid AR registered post acknowledgement card of the sixth defendant was not returned did not mean that the service of the writ and statement of claim were defective. Order 10 r 1 of the RHC required that the writ be sent by prepaid AR registered post to the defendant's last known address. Once there was sufficient evidence of posting, then it was deemed to be served on the defendant. There was no necessity to prove that the acknowledgement of the AR registered posting had been returned (see paras 2526 & 2930). In the instant case, the plaintiffs had elected to limit their claim or confine it to only that falling within O 13 r 2 of the RHC. By confining themselves to the claim for unliquidated damages to be assessed and costs in the judgment in default, the plaintiffs had expressly elected to abandon their claim for accounts and declaration which were not within the description of those stated in O 13 rr 1 to 4 of the RHC. Effectively, they had plainly volunteered to relinquish these claims and it entitled them to enter judgment in default against the defendants without the need for a motion to do so (see para 39).

22) SV Beverages Holdings Sdn Bhd & Ors v Kickapoo (M) Sdn Bhd[2008] 4 MLJ 187 Pursuant to a license agreement ('the RL agreement'), The Monarch Company Inc ('TMCI'), as owners of the trademarks 'KICKAPOO' and certain designs, granted an exclusive license to the respondent to prepare, sell and distribute in bottles and cans the finished beverages in Malaysia and Singapore. Pursuant to various agreements and acquisitions, The Monarch Beverage Company Enterprise ('TMBCE') became the successor in title to TMCI and is the owner of the trademark KICKAPOO and KICKAPOO JOY JUICE. By a letter dated 13 November 2002, TMCI notified the respondent that the RL agreement was terminated because the respondent had committed numerous breaches of the RL agreement. On 15 August 2005, under the International Trade Mark Licence and Bottler's Agreement ('the ITMLB agreement') TMBCE granted the exclusive right to the first appellant to use the KICKAPOO trademark and to make and sell the said beverages in Malaysia. On or about 21 September 2005, the respondent found out that in a notice dated 21 September 2005 TMBCE announced the appointment of the second appellant as the exclusive franchisee for the said beverages in Malaysia and that the third appellant would be the distributor of the said beverages throughout Malaysia. The respondent maintained that the notice of termination dated 13 November 2002 was mala fide, wrong, bad in law and had no legal effect. The respondent filed an action in the High Court claiming breach of contract, intentional interference with contractual relations, conspiracy to cause losses and damages, injurious or malicious falsehood and trade libel and passing off

against the appellants. The respondent also applied for an interlocutory injunction, inter alia, to restrain the appellants from using the brand name KICKAPOO and KICKAPOO JOY JUICE or from dealing with any rights as exclusive franchisee for the said drink in Malaysia and Singapore or from making, manufacturing, selling, marketing, advertising or distributing the said drink in Malaysia and Singapore. The High Court judge granted the injunction. The appellant's appealed to the Court of Appeal. Held, allowing the appeal:

The respondent disputed the validity of the termination of the RL agreement because it claimed that it had complied with all the terms of the agreement. This raised the question whether the respondent had indeed complied with all the terms of the RL agreement, which constituted a serious question to be tried (see para 16). From the definition of the tort of inducement to breach a contract, knowledge on the part of the appellants of the relevant contract and that they had the intent to interfere with it were two of the elements which must be established. On the facts, there appeared to be no direct evidence to establish that the appellants or any of them had both or any of the said elements. Further, there was no direct evidence to show that the appellant or any of them had anything to do with the termination of the RL agreement by TMCI (see para 22). From the affidavit evidence, the court could not find sufficient evidence which could be relied on to say that the respondent would suffer irreparable damages. On the contrary, from the amended statement of claim, it was clear that for all the torts that it had pleaded against the appellants, the relief which the respondent was asking for were damages for which monetary compensation would be an adequate remedy. It is settled principle that specific relief is generally declined by a court of equity where monetary compensation is an adequate remedy (see para 43). Although the respondent was in the business of producing and selling the said beverages since 1996 and the appellants had only started it in 2005, there were other relevant facts that must be taken into account in considering where the balance of justice lies. The relevant facts were not taken into account by the learned judge in considering the balance of justice of the case before her (see para 46). Although there was no evidence to show that TMCI or TMBCE had not taken any action so far against the respondent for infringement of the trademark or passing off, it could not be said that there was complete silence or inaction on the part of TMCI or TMBCE after the termination of the RL agreement. Moreover, the evidence in this case also revealed that TMBCI, the principal entity which owned TMBCE, MBA and other Monarch companies, had, in the TDO action Kuala Lumpur High Court, applied for and obtained a trade description order against the respondent on 4 January 2005. In contrast, despite its vehement dispute on the termination of the RL agreement, the respondent did not actively initiate any legal action in court to pursue the stand which it had taken. Instead, it had defiantly disregarded the notice of termination and continued to put the blame on TMCI and/or TMBCE. In the meantime, the respondent continued to produce and sell the said beverages and use the trademark in question. In the circumstances, it appeared

unfair to allow the respondent to use acquiescence in defence of its self-proclaimed rights (see para 52). As far as damages were concerned, perhaps the first appellant could be compensated by monetary compensation for which it had spent in the purchase of concentrate from TMBCE as well as other expenditure necessary for the manufacture of the said beverages. However, there would be another loss which would be more difficult to estimate and the court doubted whether the appellants would be adequately compensated under the respondent's undertaking as to damages if they were to succeed as the trial. The loss in question would be the loss of licence. The injunction would compel the first appellant to breach the ITMLB agreement leading to its termination, which in turn would result in the loss of licence to the first appellant and the consequent loss of business to the third and fourth appellants (see para 60). There were doubts and uncertainty in the origin and quality of the concentrate bases used by the respondent to manufacture the said beverages after the termination of the RL agreement. Since the RL agreement had been terminated, and thereby ending the regime and the mechanism of quality control by TMCI, there was no more guarantee that the Kickapoo drinks produced by the respondent and sold to the public were as pure and wholesome and were of the highest quality as the one produced and sold by the appellants. The important element of public interest adverted to was not considered at all by the learned judge. If she had done so she would have held that public interest had outweighed the respondent's interest (see paras 62-64).

23) Dato Wira A Nordin bin Mohd Amin & Ors v Rajoo a/l Selvappan & Ors[2007] 5 MLJ 297 The appellants were advocates and solicitors and partners of Messrs Nordin & Phua. The respondents/plaintiffs and some other third parties were all registered proprietors of undivided shares of a piece of land held under Grant No 2958, Lot 579, Mukim Ayer Panas, District of Jasin, Melaka ('the said land'). They entered into a sale and purchase agreement to sell in to Astana Strategi (M) Sdn Bhd ('Astana'). Messrs Nordin & Phua were the respondents/plaintiffs' solicitors while Messrs Badaruzaman Chandran & Co ('Messrs Badaruzaman') acted for Astana. All parties to the sale had consented to the issue document of title being deposited with Messrs Nordin & Phua pending the completion of the sale. All the registered proprietors had executed the respective memorandum of transfers of the said land in Astana's favour, which were deposited with Messrs Badaruzaman. As Astana failed to pay the balance purchase price within six months as agreed, Messrs Nordin & Phua wrote to Messrs Badaruzaman to terminate the sale and then released the title to the first to fifth defendants and eighth defendant (a middleman) based on a letter stating that the Committee had asked them to keep custody of the title. The respondents/plaintiffs contended that the first to fifth defendants and eighth defendant had obtained the title from Messrs Nordin & Phua without their knowledge and in breach of trust and forwarded the same to Messrs Badaruzaman who effected the registration of the transfer in favour of Astana, who then charged the land to Southern Finance Bhd as security for loan facilities. 5 MLJ 297 at 298

After the third appellant had completed his testimony during the trial in the High Court, the respondents/plaintiffs applied to add the appellants as defendants to the suit for, inter alia, breach of trust and conspiring with the first to fifth defendants and eighth defendant to deprive the plaintiffs of their rights to the said land. The appellants resisted the application and raised the issue of limitation. The High Court judge allowed the respondents/plaintiffs' application to add the appellants as the ninth to eleventh defendants in the case. Hence, this appeal. Held, allowing the appeal:

Section 9 of the Act concerns the recovery of land as indicated by the heading which reads: 'Limitation of actions to recover land'. As in the proposed amended statement of claim, the respondents did not seek for recovery of the said land. They only requested for damages. So s 9 of the Limitation Act is not applicable to the facts of this case which consist no claim for the recovery of land (see paras 1213). There was no conflict or inconsistency between s 22(1) and s 22(2) of the Act. Each of these subsections applies to different set of circumstances. Under sub-s (a) of s 22(1), there must be the element of fraud or fraudulent breach of trust. And under sub-s (b) of s 22(1), the trust property must be in the possession of the trustee or he has in possession of the proceeds thereof. Though breach of trust is alleged to be committed, there is no allegation in the respondents' proposed amended statement of claim, which must be relied on to represent the grounds for inclusion of the appellants as a party to the action, of fraud or for fraudulently breaching the trust. When such elements of fraud or fraudulent breach of trust is absent then sub-s (a) of s 22(1) has no application (see paras 1617). For recovery of trust property which is not in the possession of the trustee or for that matter any breach of trust would fall within s 22(2) of the Act, provided that the action so mounted by the beneficiary is not one of those causes of action or situation where a time limit is already prescribed by the Act to bring the action. If a time is so prescribed, then the prescribed period of limitation specified in the Act will apply. Otherwise, it will be six years from the date on which the action accrued. This plea of limitation is only relevant to the respondents' proposed first cause of action: for breach of trust in releasing the document of title. This was in 1996. Thus, time had lapsed for the respondents to seek redress by this action against the appellants. Such action would fail in limine (see paras 1617). Section 29 of the Act is not applicable as there is no allegation of fraud ever raised in this case against the appellants and neither is the respondents' proposed claim against the appellants is for relief from the consequence of a mistake (see para 18). When the claim is one of conspiracy then it falls under the emerging tort of conspiracy to do an act resulting in damage to the claimant. Since this proposed action is brought after this period of six years, it would also fail in limine upon a plea of limitation under this provision of the law (see para 19).

24) Orix Credit Malaysia Sdn Bhd v M/S Belquip Sdn Bhd & Ors[2007] 3 MLJ 478

Hire Purchase Hire purchase agreement Guarantee Default in payments Whether guarantor liable under guarantee The plaintiff extended a hire purchase facility ('facility') to the first defendant. As part of the security for the facility, the fifth defendant executed a guarantee agreement in which he promised to pay whatever was owed by the first defendant under the facility. The first defendant defaulted under the facility and as a result, judgment in default was entered and the same had not been set aside by the first defendant. Judgment in default was also entered against the fifth defendant, which was subsequently set aside. The fifth defendant at the material time was both a director and shareholder of the first defendant. The fifth defendant denied his liability, inter alia, on grounds that the plaintiff was in fact involved in money lending without the appropriate license and also certain terms of the hire purchase agreement were immoral and against public policy and hence should be struck out. Held, allowing plaintiff's claims:

Clauses 27 and 7.03 of the hire purchase agreement and guarantee agreement, respectively were sufficiently clear. A clause of this nature has been described as a conclusive evidence clause. Such a clause has been held to be binding and valid by courts in Australia and England (see para 12); Dobbs v National Bank of Australia [1953] 53 CLR 643 referred. There was no requirement on the part of the plaintiff to adduce evidence to prove quantum and the correctness of the amount claimed if the judgment in default against the first defendant was produced. The plaintiff not only produced the judgment against the first defendant, but also adduced ample evidence to show how the amount claimed was calculated. The judgment in default against the first defendant had not been seriously challenged by the fifth defendant except to say that the hire purchase agreement was in fact a loan transaction. Until such time that the judgment in default against the first defendant is set aside, the fifth defendant had not discharged the burden of disproving the amount claimed (see para 13). The fact that there was no payment of cash deposit did not affect the liability of the fifth defendant. As far as the plaintiff was concerned, they provided hire purchase financing to the first defendant. There was no evidence to show that the plaintiff, the first defendant and the supplier of the equipment for the facility were involved in one big conspiracy of fraud or some other illegal acts (see para 15). The letter of demand to the fifth defendant had not been seriously challenged by the fifth defendant. The letter of demand was sent to the address set out in the guarantee agreement and when there was no notice of change of address to the plaintiff, the fifth defendant cannot complain that he had not received it. The presumption was that he had received it unless proven otherwise, which the fifth defendant had failed to do (see para 16). The sum claimed did not include interest on interest. It was interest charged on overdue monthly installment which is provided for in the hire purchase agreement. In any event compound interest is allowable when the parties had agreed to it (see para

17).Terengganu State Economic Development Corp v Nadefinco Ltd [1982] 1 MLJ 365 referred. 25) RHB Bank Bhd v Yap Ping Kon & Anor[2007] 2 MLJ 65 The plaintiff's claim against first defendant was for the sum of RM3,224,505.50 under the loan agreement dated 13 September 1993 entered into between Rakyat Merchant Bankers Bhd ('RMBB') and the first defendant. All RMBB's assets and liabilities were subsequently vested in the plaintiff. The plaintiff alleged that the first defendant had defaulted under the loan agreement. The issues were, inter alia: (1) whether the first defendant entered into the loan agreement in his own capacity or as agent for the second defendant; (2) whether the plaintiff and the second defendant had exercised undue influence on the first defendant in executing the loan agreement; (3) whether there was any settlement between the plaintiff and the second defendant to discharge the first defendant (4) whether the second defendant and the plaintiff had fraudulently induced the first defendant to sign the loan agreement by falsely representing to the first defendant that it was only a temporary loan for six months from RMBB in order raise sufficient funds to take over Khong Guan Holding Bhd; (5) whether the first defendant was only acting as a nominee and/or agent of the second defendant for the loan and the first defendant would be indemnified for all losses, claims, expenses or costs arising from the loan; (6) whether the action was 2 MLJ 65 at 66 premature as the action was filed by the plaintiff on 12 September 1995, before the expiry of the extended tenure of the loan on 22 December 1995; and (7) whether the loan transaction was illegal being in contravention of of the Contracts Act 1950 s 24by reason of fraud, and of the Banking and Financial Institutions Act 1989 s 60(3)(c)('BAFIA'), by granting the loan without security. Held, allowing the plaintiff's claim against the first defendant:

Not only that there was no documentation evidence to prove the existence of nominee/agent-principal relationship between the first and the second defendant, the first defendant in executing the letter of offer and the loan agreement was fully aware of the fact that (at the time of signing all the relevant documents) there was nothing in writing to the effect that the loan was given for the second defendant and he only signed the documents as agent for the second defendant. Therefore, the first defendant had contracted in such a way as to make him personally liable to the facility granted by the plaintiff(see para 36). The law is trite in relation to the liability of a nominee and agent contracting on behalf of the principal. In arriving at the decision as to whether the nominee or agent should be held liable under a contract, the fact that the plaintiff had full knowledge of the existence of the nominee/agent-principal relationship was wholly immaterial. In the present case, the first defendant had executed the loan agreement 'in his own name without qualification'. In the premises, the first defendant shall be personally liable under the

contract even if he is acting as the agent of the second defendant and that the plaintiff has full knowledge of the same (see paras 4044). There was nothing to prove that the plaintiff and the second defendant had exercised undue influence on the first defendant. A contract entered into by a party under undue influence is voidable at the option of that party. Even if the existence of undue influence is proven, the first defendant had failed to exercise his right to rescind the loan agreement. Furthermore, the first defendant's argument that a presumption of undue influence arose based on the relationship of 'employer-employee' did not hold water (see paras 5059). The argument of undue influence only arose after the present suit was filed. There was no contemporary evidence adduced by the first defendant to prove the representation made by the plaintiff and second defendant as alleged. In the absence of any contemporary evidence to prove the existence of undue influence at the material time, it amounted to an 'afterthought' argument and ought be disregarded by this court (see para 65). By looking at the surrounding circumstances of the case and the qualification of the first defendant, the first defendant failed to prove affirmatively that the plaintiff and the second defendant exerted undue influence on him to sign the loan agreement. The first defendant signed the loan agreement with his eyes open, fully aware of the effect of the same, ie that he has to repay the loan sum in accordance to the terms of the loan agreement. Therefore, he was bound by the terms of the loan agreement (see para 70). (The evidence put forward by the first defendant in establishing fraud and conspiracy were merely speculative and without supporting evidence. The first defendant's argument on this issue must fail (see para 93). There was no evidence to show that the second defendant had made payment for the loan interest on behalf of the first defendant. In fact the receipt for the interest payment was issued by RMBB to the first defendant, not to the second defendant. In the absence of evidence to the contrary, the first defendant himself should have made the payment of interest (see para 96). There was no evidence to show the existence of any valid settlement agreement whereby the plaintiff had agreed that the first defendant be discharged from liabilities under the loan agreement and the second defendant was to take over all the liabilities himself (see para 102). The loan confirmation rollover notice was a mere notification of change of effective interest rate and the effective period thereof and not for extension of loan period as alleged by the first defendant. It was also confirmed by PW2 that the consent from the borrower is not required for rollover. Therefore, in the absence of any other evidence of extension, the plaintiff was entitled to recall the whole facility after the tenure of six months as provided under the loan agreement. The first defendant had since defaulted under the loan agreement and the plaintiff had issued a letter of demand to the first defendant. The first defendant's allegation that the plaintiff's action was premature was without merit (see para 106). Even assuming the first defendant had succeeded in proving that the loan agreement was void under s 24 of the Contracts Act 1950, s 66 of the same Act provides that a

person who has received any advantage under an agreement discovered to be void or under a contract which becomes void, is bound to restore it or make compensation for it, to the person from whom he received. In the present case, as far as the plaintiff was concerned, the loan was disbursed to the first defendant and it was the first defendant who had signed the drawdown notice. In other words, the first defendant was the one 'who has received the advantage' under the loan agreement. Therefore, the first defendant was bound to restore it or make compensation for it to the plaintiff (see para 111). Neither s 60 of BAFIA nor any other section in the Act declares that an agreement in contravention of s 60 is void (see para 118). Therefore, the argument of the first defendant that the loan agreement was in contravention of s 60 of BAFIA and therefore rendered void under s 24 of the Contracts Actmust fail (see para 118120). On the balance of probabilities the first defendant had failed to prove his claim against the second defendant. The evidence showed that the first defendant executed the loan agreement on his own behalf, not on behalf of the second defendant. There was no convincing evidence to show that the second defendant had agreed to assume all liabilities of the first defendant in the loan transaction. That being the case, the court found that the first defendant's claim against the second defendant must also fail (see para 156).

26) CHOO CHIN THYE v CONCRETE ENGINEERING PRODUCTS BHD & OTHER APPEALS[2005] 4 MLJ 14 ICP and CEPCO were both public listed companies and direct competitors in the same industry. On 19 January 1996, one Low Thean Hock ('Low') purchased a substantial shareholding of CEPCO and became a major shareholder of CEPCO. Low installed one Choo Chin Thye ('Choo') as his nominee director in CEPCO. On 5 June 1996, Choo executed a management agreement ('the management agreement') for and on behalf of CEPCO with ICP. The managing director of ICP, Lim Yong Kiat ('Lim') signed for ICP. Clause 2 of the management agreement provides that the agreement was conditional upon the approval of the Ministry of Trade and Industry ('MITI') and in the event of the approval not being obtained within the period of 12 months from the date thereof, the agreement shall terminate and be null and void and of no effect whatsoever. Pursuant to the agreement and on Choo's invitation, Lim and various personnel from ICP moved into the office of CEPCO and within days had taken over three of CEPCO's factories and acquired CEPCO's physical assets and core business located around the country. Subsequently, on 2 July 1996, the controlling shareholder of CEPCO switched hands to Dato' Fasir. At the same time, CEPCO prohibited the representatives of ICP from entering the premises of CEPCO to carry out their management duties. Arising from these facts, legal actions were then commenced by the parties. ICP claimed that there had been a breach of the management agreement by CEPCO when ICP was prevented from entering CEPCO headquarters to supervise the accounts in connection with the provision of management services. In the High Court, ICP sought, inter alia for a declaration that the management agreement was valid and enforceable and specific performance of it thereof. CEPCO's defences to ICP's claim

were that Choo had no authority (actual or ostensible) to execute the management agreement and that the management agreement, being a conditional agreement requiring MITI's approval, had lapsed and become unenforceable since this condition was not fulfilled within the stipulated time. CEPCO also filed a counter-claim against ICP for fraud, conspiracy, breach of duty and breach of fiduciary duty. These causes of action were pleaded against Choo, ICP and Lim. The learned trial judge, after having decided that Choo had no actual authority, found that Choo did have apparent or ostensible authority to bind CEPCO. However, the judge held that the management agreement was a conditional agreement, and since MITI's approval was not obtained, the condition precedent was not met to give effect to the management agreement and hence, the management agreement had lapsed by effluxion of time. The judge also exonerated ICP and Lim from any blame. ICP and CEPCO appealed. Held, dismissing the appeals:

The learned trial judge was not wrong to conclude that the condition precedent of the management agreement had not been fulfilled to give effect to the contract and by effluxion of time, the agreement had lapsed (see paras 28 and 35). Both ICP and CEPCO was of the same mind that they needed the approval of MITI for the purpose of ICP taking over the management of CEPCO, thus the inclusion cll 2.1 and 2.2 in the management agreement (see para 34). The learned trial judge had also carefully analysed the oral testimony and compared it with the contemporaneous documents and arrived at a conclusion that Choo did not have the actual authority to enter into the management agreement (see para 38). Thus, since MITI's requirement remained unfulfilled beyond the period provided for in the management agreement and management agreement came to an end by effluxion of time and Choo had no actual authority to enter into the management agreement, the issue of wilful breach by CEPCO on the management agreement and whether ICP was entitled to remedy of specific performance or damages in lieu as submitted by the document, did not arise. Consequently, ICP's appeal was dismissed (see para 39). The learned trial judge had properly and thoroughly evaluated the evidence and quite correctly found that there was no dishonesty or conspiracy on the part of Lim and hence ICP (see para 45). The learned trial judge found for a fact that there was no such intention existing between Lim and ICP nor was there any intention between them and Choo to effect an unlawful purpose. There was a further finding that both Lim and ICP entered into this transaction as a business venture which they felt was advantageous and beneficial to their own commercial concern and this was entirely acceptable as they were then of commercial concern (see para 47). On both issues of constructive trust and conspiracy, CEPCO in seeking a reversal of the learned trial judge's judgment was challenging the learned trial judge's findings of facts. It is trite law that only in rare cases that an appellate court would interfere with the primary findings of facts made by the trial court. The law is very clear, that an appellant, when challenging finding of fact have a

heavy burden, which he must discharge if he is to win. In this respect CEPCO had failed to discharge this heavy burden (see para 52). Choo was an agent of CEPCO. ICP was invited by Choo on behalf of CEPCO to manage CEPCO's core business. Full access to all records were also given to ICP by CEPCO. Clearly, Choo had an apparent or ostensible authority to deal with Lim and ICP and CEPCO was therefore estopped from claiming that Choo had no such authority (see para 59). Since Choo had the apparent or ostensible authority to permit ICP to manage CEPCO's business and for that purpose Lim and various personnel from ICP were allowed to move into the office and factories of CEPCO, the issue of trespass by ICP was a non-issue. Accordingly, CEPCO's action against ICP and Lim was rightly dismissed (see para 60).

27) TUNG AH LEEK & ANOR v PERUNDING DJA SDN BHD & ORS[2005] 3 MLJ
667 The first defendant was incorporated as a private limited company with initially four shareholders namely first plaintiff, second plaintiff, third defendant and fourth defendant. The second, fifth, sixth, and seventh defendants became shareholders of the first defendant after the incorporation. The sixth and seventh defendants were holding shares on trust for the eighth defendant. The ninth and tenth defendants were the secretaries of the first defendant. The first defendant's memorandum and articles of associations (M & A) states that the first defendant's principal activities are 'building and road construction contractors, builders, carpenters, general decorators, civil, electrical and mechanical engineering'. The second defendant was awarded a contract by Jabatan Kerja Raya, Selangor (JKR) (main contract). The second defendant had subcontracted the Main Contract to the first defendant. The first plaintiff, at all material times, was the managing director of the first defendant. The first plaintiff and second plaintiff were directly involved in the day to day running of the entire project. The first plaintiff was also appointed the first defendant's site agent with the second plaintiff as his assistant. The first plaintiff and second plaintiff were removed from their respective positions as managing director and site agent (first plaintiff) and assistant site agent (second plaintiff) sometime in March 2002. By the statement of claim dated 24 September 2002 the plaintiffs' claim in brief, against the defendants was one based on the tort ofconspiracy by the defendants and breach of agreement by the third to seventh defendants to deprive the plaintiffs of their share in profits to be earned by the first defendant from the said project. The plaintiff contended that the said project was duly completed and the profits due, which the plaintiff anticipate were in the region of RM20 million, should be distributed based on their ratio of shares in the first defendant. The plaintiffs were afraid that the defendants would dissipate the monies and deprive the plaintiffs of their shares. The plaintiffs also claimed that there was an understanding that the first defendant company was a partnership between the shareholders and that the company was a single-purpose company and was to be wound-up after completion of the project. The plaintiffs filed a writ against the defendants and further filed for an interlocutory injunction and subsequently filed for a second interlocutory injunction praying for among others inter alia that: (1) the first defendant be wound up and provisional liquidator be appointed; (2) the defendants be restrained from dealing with the monies they

received, receiving or will receive for the main project without the permission of the plaintiffs; and (3) the defendants be restrained from taking any action to alter the equity of the first defendant company by increasing paid up capital. The plaintiffs also claimed that they had personal right to profit in the first defendant company. Held, dismissing the plaintiffs' applications with costs: (1) The M & A is considered as 'common law' of the company and one of the most fundamental principles is that 'the majority rules'. Where the parties have agreed to abide by the terms contained in the M & A, the minority cannot complain on the majority rule. If there was such an agreement that the first defendant company was a single-purpose company and was to be wound-up after completion of the project then such understanding or agreements should have been categorically incorporated in the M & A right from beginning during its incorporation (see para 11). (2) The plaintiffs being the minority shareholders in the first defendant company had in actual fact brought a winding-up petition in a form of a writ and on application for interlocutory injunction. The actual mode that should be employed by the plaintiffs and the proper process should be in the form of a petition under s 181 of the Companies Act 1965. Hence the very form and procedure employed by the plaintiff was wrong and the injunctions sought cannot be granted by this court, as the mode employed was not provided by the rules (see para 18). (3) The plaintiffs also claimed that they had personal right to profits in the first defendant company. The court was of the view that all earnings of the first defendant company were property of the first defendant company and it was the prerogative of the first defendant company how this property or profits of the first defendant company be dealt with (see para 19). (4) If the majority of the shareholders have decided to increase the paid up capital of the first defendant company for reasons best suited the first defendant company, then the court should be slow to interfere unless there were elements of oppression, fraud orconspiracy (see para 25). (5) The application for the increase in the paid up capital of the first defendant could proceed. To stop the first defendant company from calling for an increase in the paid up capital, when the shareholders and the board of directors have agreed, would not be in the interest of the company (see para 32). (6) After going through all the issues raised by the plaintiffs in support of their applications the court was satisfied that those issues were not triable issues. Even if the issues were considered triable issues, the court was satisfied that interlocutory injunction should not be granted on the ground that damages in the form of financial remedy as claimed by the plaintiffs, would be adequate remedy recoverable at common law (see paras 33 and 34).

28) ARAMIN SDN BHD v JUTA RASMI (M) SDN BHD (ADAM BIN MAT SAM, INTERVENOR) [2005] 4 MLJ 536 The plaintiff was appointed as the main contractor to build and construct 359 units of bungalows under a project (the 'said project'). The appointment of the plaintiff as the main contractor for the

said project received the sanction of the Selangor State Government. The participants of the said project had been duly informed about the appointment of the plaintiff as the main contractor to the said project by way of a letter from the Gombak land office. In addition to that, all the parties involved in the said project were duly informed about the plaintiff's role. The 'Jawatankuasa Pembantu Penyelaras Projek' (the 'JKPPP') had consented to the appointment of the plaintiff as the main contractor to the said project and there it was also stated that the plaintiff was solvent and was capable of operating the said project. The plaintiff contended that the defendant had intruded and/or illegally entered and/or broke into the site of the said project and by virtue of that interference the plaintiff was unable to complete the said project. The plaintiff also contended that the defendant had refrained and/or had stopped the plaintiff from entering the site of the said project and, consequently, as a result thereof the plaintiff was unable to complete the said project. The plaintiff sought to obtain an interlocutory injunction to, inter alia, prevent the defendant from entering and/or staying at the construction site. Held, dismissing the application: (1) The plaintiff had been wound up and a stay was granted. Therefore, the plaintiff was an insolvent company. It served no useful purpose for the plaintiff to file an application to seek for injunctive reliefs when the plaintiff was in the red and was unable to complete the said project (see para 28). (2) There was no serious question to be tried. The plaintiff had on their own accord withdrawn from being the contractor for the said project and had considered the agreements entered with the participants of the said project as being revoked. The plaintiff had abandoned the said project since 1999 (see para 34). 2005 4 MLJ 536 at 537 (3) The defendant was appointed by JKPPP as well as by the participants of the said project to replace the plaintiff and to complete the said project. A construction agreement was entered between the defendant and the participants of the said project. The defendant had even performed its legal obligations under the said project to the satisfaction of the participants. The plaintiff's application for injunctive reliefs had jeopardised the contract between the defendant and the participants of the said project (see para 34). (4) To say that the plaintiff had a cause of action against the defendant based on the construction agreements with the participants of the said project would be to go against the doctrine of privity of contract. The defendant was not a party to the contract entered between the plaintiff and the participants of the said project (see para 34). (5) The affidavit in support of the application for injunctive reliefs averred that there was a conspiracy to remove the plaintiff from being the contractor to the said project. Conspiracy is 'an actionable tort' and that 'the remedy for which is damages'. Consequently, as far as this action is concerned, damages would be an adequate remedy for the plaintiff and there was no justification for this court to grant the injunctive reliefs (see para 36); Perbadanan Setiausaha Kerajaan Selangor & Ors v Metroway Sdn Bhd & Anor (and another appeal) [2003] 3 MLJ 522 followed. (6)

The balance of convenience lied in favour of the defendant. The said project was abandoned by the plaintiff. Under the defendant, the said project gained some momentum. The bank even released some payments on behalf of the participants to the said project. All the participants to the said project preferred the defendant. They wanted the defendant to build the bungalow houses for them. They have high expectations of the defendant (see para 38); American Cyanamid Co v Ethicon Ltd [1975] AC 396, [1975] 1 All ER 504 followed. 29) KENWOOD ELECTRONICS (MALAYSIA) SDN BHD v PEOPLE' S AUDIO SDN BHD & ORS[2003] 5 MLJ 276 The plaintiff was a distributor of the Kenwood brand of electronic audio-visual equipment. The plaintiff supplied Kenwood products to the first defendant but the first defendant failed to pay for the said goods. The plaintiff then filed this action against the first defendant at the High Court to recover the purchase price of the said goods. The second, third and fourth defendants ('the three defendants') were later included as co-defendants in this action. The plaintiff's claim against the three defendants was founded on a conspiracy to defraud. The plaintiff alleged that the second and third defendants had used the first and fourth defendants to defraud the plaintiff by purchasing goods from the plaintiff under the name of the first defendant and thereafter selling the goods under the name of the fourth defendant with the payments for the goods being made to and received by the fourth defendant instead of the first defendant. The plaintiff succeeded in obtaining summary judgment against the first defendant but the judgment remained unsatisfied as the first defendant had no assets. The plaintiff was determined to pursue its claim for the sum owing from the three defendants, whom the plaintiff alleged had received the sale proceeds. On 24 November 2000, the plaintiff filed a summons for directions in encl 32 under O 25 of the Rules of the High Court 1980 to, inter alia, seek leave to serve on the three defendants interrogatories, which in the main required the three defendants to provide details of transactions involving the said goods sold by the first defendant to the fourth defendant. The deputy registrar dismissed the plaintiff's application in encl 32. The plaintiff appealed to the judge in chambers against the decision of the deputy registrar but the appeal was dismissed. In the instant application (encl 42), the plaintiff sought an order to compel the three defendants to make further and better discovery of, inter alia, invoices and delivery orders issued by the first defendant, the fourth defendant and bank 2003 5 MLJ 276 at 277 statements of all the defendants ('the said documents'). The issues to be determined in this application were whether: (a) the said documents were relevant; (b) an order of court compelling the three defendants to disclose and produce the said documents would have the effect of shifting the legal burden of proof from the plaintiff to the three defendants; (c) the three defendants should be compelled to disclose and produce for inspection the said documents on the ground that the said documents were within their special knowledge although the documents were likely to incriminate them; and (d) the doctrine of res judicata was applicable in view of the earlier order by the judge in chambers. Held, dismissing the plaintiff's application: (1) Although the said documents concerned were relevant to show whether the fourth defendant had received payment for the said goods, the said documents were not relevant to the plaintiff's cause of action for conspiracy to defraud against the three defendants because there was no material advanced by the plaintiff other than allegations that the said documents would show that the three defendants intended to use the veil of incorporation of the first defendant to acquire the said goods from the plaintiff and use the fourth defendant as a vehicle to sell the

goods with the object of defrauding or cheating the plaintiff (see p 287FG); Gamlen Chemical Co (UK) Ltd v Rochem Ltd & Ors [1983] RPC 1 distinguished. (2) An order of court compelling the three defendants to disclose and produce the said documents for inspection by the plaintiff would have the effect of shifting the legal burden of proving conspiracy to defraud from the plaintiff to the three defendants (see p 287G H); Mary Ng v R [1958] AC 173 followed; R v Edwards [1974] 2 All ER 1085 distinguished. (3) Although the said documents were specially within the knowledge of the three defendants, the plaintiff's application should not be granted because the documents were likely to incriminate them (see p 288A). (4) The doctrine of res judicata was applicable because there were substantial and material similarities between the interrogatories and the said documents and the plaintiff's instant application was an attempt to circumvent the earlier decision of the judge in chambers (see p 288B). 30) OMEGA HOLDINGS BHD v DATO' TIAH THEE KIAN & ORS[2002] 6 MLJ 20 The plaintiff sued its former director ('the first defendant') for breach of fiduciary duty and the sixth defendant for, inter alia, conspiracy and breach of trust as a constructive trustee for causing the plaintiff's subsidiary company, Omega Securities Sdn Bhd ('Omega Securities') to run foul of s 67 of the Companies Act 1965 resulting in its stockbroking license to be revoked. The first and sixth defendants applied to strike out the plaintiff's claim and to cease to be the defendants in the suit. The senior assistant registrar dismissed their applications. The defendants appealed. To strike out the plaintiff's claim, the first defendant raised the grounds that: (a) the first defendant was never a shareholder of the plaintiff; (b) the first defendant was never a director of the plaintiff or Omega Securities; and (c) the plaintiff's documents exhibited in its affidavit in reply were inadmissible hearsay. Further, the sixth defendant raised the grounds that: (i) the sixth defendant merely conducted the share transactions in its capacity as a stockbroker in the ordinary course of business; and (ii) the plaintiff's documents exhibited in its affidavit in reply were inadmissible hearsay. Held, dismissing the appeals: (1) It was inappropriate to summarily strike out the plaintiff's claim because the very question of whether the first defendant was a shadow director was a question to be tried. A striking out application was not applicable to determine whether a person was a shadow director. That process could only be determined through discovery process or cross examination of the witness (see pp 25F, I-26A); Re A Company (No 005009 of 1987), ex p Copp & Anor [1989] BCLC 13 followed. Further, as there were serious allegations of conspiracy against the first defendant, the summary process of terminating the plaintiff's claim upon affidavit evidence was inappropriate without the advantage of oral evidence, cross examination, discovery and interrogatories. Clearly, the plaintiff's claim was not obviously unsustainable (see p 26E). 2002 6 MLJ 20 at 21 (2) On ground (c) of the first defendant's appeal and ground (ii) of the sixth defendant's appeal, the complaint was that since the deponent of the plaintiff's first affidavit, Peter Chen was never a director when the cause of action occurred or arose, he had no personal knowledge of its contents; nor was he the maker of those documents exhibited in his affidavit. It was expressly provided under O 41 r(5)(2) of the Rules of the High Court 1980 ('the RHC') that affidavits sworn for the purpose of an interlocutory application may contain statements of information or belief

with the sources and grounds thereof. Here, Peter Chen had already deposed in the plaintiff's first affidavit that the facts and matters which were deposed in his affidavit were within his knowledge and belief and/or from the records which he, an ex officio, had access to; and he clearly indicated that the source of the information was the records of the plaintiff. Thus, encl 35 did not run foul of O 41 r 5(2) of the RHC and it was legally admissible and competent document for the current purposes (see p 26F-H). (3) On ground (i) of the sixth defendant's appeal, the plaintiff's action against the sixth defendant was also premised upon conspiracy, whereby it was alleged that the sixth defendant together with the other defendants unlawfully conspired with the predominant purpose of causing loss to the plaintiff and Omega Securities by unlawful means (see p 27H-I). Therefore, the court did not find this to be a fit and proper case for striking out of any of the averments in the amended statement of claim or dismissal of claim against the first and sixth defendants and dismissed both the appeals with costs (see p 28A). 31) NGOI THIAM WOH v MAXWELL, KENION, COWDY & JONES (SUED AS A FIRM) & ANOR[2002] 3 MLJ 341 The plaintiff borrowed a sum of money from the second defendant to pay the balance purchase price of one unit of a condotel and this sum was to be repaid by 156 monthly instalments. The plaintiff executed a deed of assignment as a security for the loan in favour of the second defendant. The plaintiff defaulted in his instalment payments and the first defendant, on instructions from the second defendant, issued a notice of demand dated 21 October 1997. Subsequently, the first defendant issued a notice of default dated 22 November 1997 demanding that the plaintiff make good the alleged default upon the expiry of seven days, failing which the second defendant would exercise its rights to sell the plaintiff's condotel. The defendants then on 9 January 1998 advertised in The Star newspaper a proclamation of sale of the said condotel. The plaintiff filed a suit in the High Court in Ipoh, Civil Suit No 22-24-98 against the second defendant and others to restrain the second defendant from selling the said unit until disposal of the case. Meanwhile, the first defendant filed an originating summons under O 31 of the Rules of the High Court 1980 ('the RHC') which they withdrew and filed a fresh originating summons under O 83 of the RHC. The second defendant filed another suit in the Ipoh High Court vide Civil Suit No 22-68-99 against the plaintiff to recover the loan sum together with interest. During case management, it was agreed that the court decide the case pursuant to O 33 r 2 of the RHC on two issues namely: (i) whether the first defendant, acting as solicitors for and on the instructions of the second defendant, defamed the plaintiff by causing the advertisement of the proclamation of sale dated 9 January 1998 and (ii) whether the plaintiff could sustain an action in defamation against the defendants upon the High Court in Ipoh having held in a civil suit filed by the second defendant against the plaintiff, that there was no conspiracy or fraud and negligence on the part of the second defendant. Held, dismissing the suit with costs: (1) In this case, there was an absolute assignment and the second defendant had an absolute right to proceed to advertise the proclamation of sale and to auction off the condotel without 2002 3 MLJ 341 at 342 applying for an order of the court. Since the second defendant had the absolute right to proceed with the proclamation of sale, the first defendant, who acted as solicitors and thus as agents of the second defendant, was clearly acting within the law when it caused the advertisement to

appear in The Star, Phileoallied Bank (M) Bhd v Bupinder Singh a/l Avatar Singh & Anor [2002] 2 MLJ 513 (folld) followed (see p 347G-H). (2) In Civil Suit No 22-68-99 filed by the present second defendant against the present plaintiff claiming the loan sum, whilst the trial judge dismissed the second defendant's claim, he however dismissed the present plaintiff's contention of misrepresentation, conspiracy, fraud and negligence against the second defendants and related companies. Since the plaintiff was not appealing the decision the finding of the trial judge must be accepted as correct (see pp 347H348A). 32) JUSTRITE SDN BHD v SHAPADU ENERGY AND ENGINEERING SDN BHD & ORS[2002] 3 MLJ 501 The first defendant had secured a contract for certain mechanical construction. The first defendant invited three companies, one of them being the plaintiff, to submit a competitive quotation to provide the insulation service for the said construction ('the ABF work'). Only two of them, the plaintiff and Jemerah Sdn Bhd ('Jemerah'), submitted their proposals. The ABF work was given to Jemerah. The plaintiff brought this action against all the defendants for loss and damages arising from an alleged breach of an oral contract by the first defendant to award the ABF work to the plaintiff. The second to the fifth defendants were sued for the alleged misrepresentation made by them to the plaintiff in respect of the award of such a contract. In addition, the second and fifth defendants were also sued for the tort of conspiracy with a view to injure the plaintiff. The defendants denied the plaintiff's claim and instead counterclaimed against the plaintiff for the lifting of the Anton Piller order and for exemplary damages in respect of loss and damages occasioned thereby. The issues that arose for determination were, inter alia, (i) whether there was a contract formed between the plaintiff and the first defendat in respect of the ABF work; (ii) whether the second to the fifth defendants had collectively misrepresented to the plaintiff that it had been awarded the ABF work; and (iii) whether there was any conspiracy between the second and fifth defendants to injure the plaintiff. Held, dismissing the plaintiff's claim and allowing the defendants' counterclaim: (1) With regard to exh P20, from its nature and content, the same does not constitute the Management and Tender Committee ('MTC') decision to award the ABF work to the plaintiff. The said document was just another internal paper of the committee for circulation to all its members for their decision on the recommendation to award the ABF work to the plaintiff. Such circular will only have effect and be operative as the decision of the committee after all the members entitled to receive the same have endorsed their signatures thereon signifying either their agreement or rejection to the recommendation so made. In the 2002 3 MLJ 501 at 502 present case, the fifth defendant had not signed the said paper for it to have any effect (see p 510B-D). (2) Having regard to the facts and circumstances of the case as a whole, including the subject matter of the said representation, the stage of the negotiation of the ABF work, the position held by the third defendant in the first defendant's company and the act of the plaintiff in further submitting the revised rate for the valve after the alleged oral contract, the court finds on the balance of probabilities that the third defendant did not make the alleged representation. It is not probable that the staff of the first defendant also has knowledge of the decision of the MTC on the award of the ABF work when the MTC Paper was yet to be signed by one of its members (see pp 510H-511A).

(3) All the evidence is not enough to show that each of said defendants individually had held themselves out as having the actual authority to enter into a contract for and on behalf of the first defendant. To succeed in such claim, the plaintiff must show that the first defendant company had, or the other defendants themselves had, made the representation, by documentary evidence or otherwise, that such defendants or they, as the case may be, had such authority. In the present case, no such evidence was presented by the plaintiff (see p 511E-F). (4) There is no basis in the assertion that the second and the fifth defendants had come to an agreement to overturn the first defendant's earlier decision to injure the plaintiff (see 513C-D). (5) Upon evaluation of the evidence adduced at the trial as a whole, the court is satisfied that the plaintiff in the affidavit in support of the Anton Piller order failed not only to make a full and frank disclosure of all material facts known to them, but also to make proper inquiries of any relevant facts related thereto. Such non-disclosure includes the date of the alleged acceptance of the plaintiff's bid, how and by whom the acceptance was made, the subsequent submissions of further revised rates on the valve and the reduction of the plaintiff's lump sum price after the alleged oral contract. All such particulars were material facts which needed to be disclosed and which would undoubtedly have effect on the decision of the court whether to grant the order or otherwise. The court allowed the counterclaim (see pp 514H-515A). 33) MUI PLAZA SDN BHD v HONG LEONG BANK BHD[1998] 6 MLJ 203 At all material times, original owner of MUI Plaza was the plaintiff who rented out 13 premises therein to Hong Leong Bank Bhd ('the defendant'), formerly known as MUI Bank. On 13 November 1993, Malayan United Industries Bhd ('MUIB') sold MUI Bank to Hong Leong Credit Bhd. MUI Bank thus changed its name to that of the defendant. In June 1994, the defendant indicated its intention to terminate existing tenancies to the plaintiff. The plaintiff agreed subject to payment of full rental for the unexpired term. This was confirmed by the minutes of the real estate agents appointed by the defendant to find replacement tenants for the 13 tenancies it intended to vacate. This was not disputed in 7 of the 13 tenancies. The defendant remained in occupation of the various tenancies until January 1995 wherein the plaintiff found replacement tenants but at a lower rental. The plaintiff brought a claim against the defendant for the shortfall in rental on all 13 premises for the unexpired term of the tenancies. The plaintiff applied for summary judgment of an unliquidated sum and the deputy registrar allowed the claim. The defendant appealed. In its appeal, the defendant argued that the tenancies were voidable and avoided by the defendant by virtue of the provisions of s 132E of the Companies Act 1965 ('the Act'). In this regard, the defendant argued that the decision taken by the defendant (as then constituted) was taken by the management committee on 3 August 1993. Out of the six disputed tenancies, three were to expire on 28 February 1994, one on 31 July 1994 and two on 31 August 1994. At that point in time, both the plaintiff and the defendant were owned by MUIB wherein at all material times Tan Sri Khoo Kay Peng was a substantial shareholder. As a result, the defendant argued that by virtue of s 132E of the Act, the tenancies could not be enforced by the plaintiff as against the defendant as no resolutions as required were passed. It was not in dispute that the transaction was 1998 6 MLJ 203 at 204

not first approved by the defendant (as then constituted). The defendant further argued that there was a conspiracy between the plaintiff and the then directors and senior management of the defendant, in view of the imminent takeover of the defendant, to injure the defendant by entering into renewed tenancies at a much earlier time than required with the desired purpose to 'lock in' the defendant to such renewed tenancies. As a result, the defendant was seeking to bring in as additional defendants the various directors and senior management of the defendant (as then constituted). Held, allowing the appeal: (1) Three conditions must be satisfied before s 132E of the Act is to be invoked, namely: (i) there is an arrangement or transaction between a company with a person connected; (ii) to acquire from such a person; and (iii) any non-cash assets of the requisite value of not less than RM10,000 but exceeding RM250,000 or 10% of the company's assets value.It was evident by a reading of s 122A of the Act that the plaintiff was a person connected to the defendant. At that point in time, MUIB had a controlling interest in both the plaintiff and defendant (as then constituted) virtue of s 122A(3) of the Act. Each tenancy and the combined value of the six tenancies in dispute would exceed RM250,000. It was a triable issue whether each tenancy was to be construed separately or to be valued together (see pp 209H and 210A, F). (2) For an arrangement or transaction to occur within the meaning of s 132E of the Act, there must be a unity of purpose whereby each of two or more parties intentionally aroused in writing, in the other, an expectation that he will act in a certain way and he incurred at least a moral obligation to do so (see p 210H); Re British Basic Slag Ltd's Agreement [1963] 2 All ER 807 followed.For the six tenancies, it was clear that the landlord and tenant were the same parties, the tenants were in the same premises, the decision to renew was taken at the same time and for the same reasons. There was a clear unity of purpose to constitute an arrangement within the meaning of s 132E of the Act. As such, the tenancies were voidable at the instance of the defendant by virtue of s 132E of the Act unless ratified by the company at a general meeting. Evidence was required to prove such ratification and this raised a triable issue (see pp 210I and 211A-C). (3) As for the issue of conspiracy, the contention that conspiracy existed between the plaintiff and the then directors of the defendant to injure the defendant needed to be adjudicated at trial. In this regard, the issues as to whether the parties were aware of Hong Leong's interest in the defendant, the renewal of the tenancies much earlier than required and the allegation that the tenancies were saddled with excessive rentals were triable 1998 6 MLJ 203 at 205 issues raised. Moreover, the counterclaim arising from the defence of the conspiracy if proven would provide a complete answer to the plaintiff's claim (see pp 211D and 212F-G, I). (4) Since the plaintiff's claim for damages was unliquidated, it was wholly unsuitable for summary judgment unless there was clear and cogent evidence of a lack of defence (see p 213C); Credit Corp (M) Bhd v Bulan Sabit Sdn Bhd & Ors [1989] 2 MLJ 127 followed. 34) ONG BAN CHAI & ORS v SEAH SIANG MONG[1998] 3 MLJ 346 The first appellant and the respondent signed an agreement of sale and irrevocable power of attorney ('the 1980 agreement') in respect of three lots of land in Johor Bahru which the respondent and his brother each held one half undivided share. The respondent sold his half share to the first appellant and his brother sold his undivided half share of those lots to the fourth appellant free from encumbrances. The first appellant contended that he had given a total sum of RM682,000 to the respondent as friendly loans and the first appellant had never

demanded for repayment. Since the respondent was unable to pay his debt, he and the respondent agreed orally to treat the friendly loans given to the respondent as a set-off against the selling price for the respondent's undivided half share in the said land. This was contradicted by the respondent who said that he had never agreed to that. The first appellant later made use of the irrevocable power of attorney given by the respondent to him and transferred the half share of the respondent to himself. By a sale and purchase agreement dated 28 February 1989 ('the 1989 agreement'), the first appellant, as the registered proprietor of the undivided one half share of the land, and the respondent's brother for his undivided half share through the power of attorney given by him to the first appellant, sold the said land to the second and third appellants free from all encumbrances. The respondent then entered a private caveat against the land which was removed by the Registrar of Titles. In the High Court, the trial judge gave decision in favour of the respondent and ordered, inter alia, one half undivided share in the three lots of land be registered in the name of the respondent. 1998 3 MLJ 346 at 347 On appeal, the court had to decide: (i) whether the first appellant had acted fraudulently against the respondent in using the power of attorney granted by the respondent to transfer his undivided half share to the first appellant himself; (ii) whether the first appellant, second appellant, third appellant and fourth defendant have conspired to defraud the respondent of his undivided half share in the land; and (iii) whether the second and third appellants and their nominee the fourth appellant are bona fide purchasers of the undivided half share from the first appellant. At the same time, the respondent filed a cross-appeal seeking variations of the decisions of the judge. Held, dismissing the first appellant's appeal but allowing the second, third and fourth appellants' appeal: (1) Without the knowledge and consent of the respondent, and without paying any purchase money to the respondent under the 1980 agreement, the first appellant transferred to himself the respondent's undivided half share in the three lots of land and charged that share to the bank for his own benefit, thus depriving the respondent of his own interest in the property. By this overt act, the first appellant had committed fraud within the ambit of s 17 of the Contracts Act 1950. Moreover, there are no express provisions in the 1980 agreement to authorize the first appellant to deduct the purchase price from or set it off against the debt owing by the respondent to the first appellant. Without any proper document to set off the purchase price against the friendly loans to the respondent, the first appellant was not entitled to use the power of attorney to transfer the respondent's undivided half share into his own name (see p 359BD).Furthermore, although the terms and conditions of the 1980 agreement had been explained to the respondent before he signed it, at the material time he had no independent solicitor to advise and act for him in the transaction. As the first appellant was an interested party and there was a conflict of interest, he should have advised the respondent and insisted that the latter be represented by his own solicitor, so that any fraudulent act or improper conduct could be avoided in the best interest of both the contracting parties. The trial judge was, on the evidence, right in law in finding undue influence and breach of trust committed by the first appellant against the respondent. There are no reasons to interfere with those findings (see pp 359G and 360C). (2) The respondent's evidence on conspiracy is not credible. On the evidence, the judge found that the respondent had failed to prove his case against the fourth defendant. The respondent did not appeal against the specific findings of the judge. Failure on the part of the respondent to appeal against the specific material findings by the judge would inevitably mean that the respondent had accepted those findings which would have the legal effect of totally demolishing his charge of conspiracy to defraud (see pp 360D-E and 361B).

1998 3 MLJ 346 at 348 (3) The caveats of the respondent were entered after the execution of the 1989 agreement against the whole of the three lots of land when he claimed only one half of each lot. The caveats are therefore defective and cannot be allowed to remain on the register. The respondent did not challenge this removal under s 418(1) of the National Land Code 1965 ('the NLC'). The judge, having found that the plaintiff had failed to prove that the defendants have conspired to deprive him of his property and that the removal of the caveats of the respondent was also to be in order, should have found the title of the fourth appellant indefeasible and protected by s 340(3) of the NLC, as it was acquired in good faith and for valuable consideration from the first appellant. The judge had erred in law in ordering the half share to be registered in favour of the respondent. The trial judge also erred when holding that a person is not a bona fide purchaser until he has paid the full purchase price. In order to be a bona fide purchaser, one should have contracted in good faith for value, and knowledge of an adverse claim is not fraud. The material time is the time of the transaction (see pp 362E, 363F and 372H-I); Aik Ming (M) Sdn Bhd & Ors v Chang Ching Chuen & Ors and another appeal [1995] 2 MLJ 770 distinguished and Pekan Nenas Industries Sdn Bhd v Chang Ching Chuen & Ors [1998] 1 MLJ 465 followed. Per curiam: A distinction is drawn between criminal fraud and civil fraud in Ang Hiok Seng @ Ang Yeok Seng v Yim Yut Kiu (Personal representative of the estate of Chan Weng Sun, deceased) [1997] 2 MLJ 45, which will have a bearing on the standard of proof by the person alleging fraud. Where the allegation of fraud in civil proceedings concerns criminal fraud such as conspiracy to defraud or misappropriation of money or criminal breach of trust, the burden of proof is the criminal standard of proof beyond reasonable doubt, and not on balance of probabilities. An allegation of criminal fraud in civil or criminal proceedings cannot merely be based on suspicion or speculation (see p 358B-D). 35) ELECTRO CAD AUSTRALIA PTY LTD & ORS v MEJATI RCS SDN BHD & ORS[1998] 3 MLJ 422 The first and third plaintiffs both are companies incorporated in Australia were the owner of the intellectual property rights in the Stopcard Auto Theft Device ('Stopcard'). The second plaintiff was incorporated in Malaysia to market the product in Malaysia. The plaintiffs claimed that the defendants' device ('Stopcar') derived from the Stopcard. The third plaintiff had earlier entered into a licence agreement ('the licence agreement') with a company of which the second defendant was a director. The second defendant later became a director of the second plaintiff. Pursuant to this, confidential information pertaining to the Stopcard was provided to the first defendant, resulting subsequently in the execution of a confidentiality agreement on 3 April 1995 ('the confidentiality agreement'). Thereafter, the second defendant resigned from the second plaintiff. On 30 November 1995, 'Stopcar' was launched. The second plaintiff 1998 3 MLJ 422 at 423 received a letter from the fourth defendant's solicitors the company which claimed to have developed the Stopcar demanding the cessation of the use of the trade mark 'Stopcard'. It was unchallenged that the second plaintiff had, prior to the launch of 'Stopcar', heavily publicised their product 'Stopcard' and had on 27 November 1995 launched the 'Stopcard' product. The plaintiffs claimed for, inter alia: (i) specific performance as against the first defendant of the confidentiality agreement; (ii) an action in passing off against all the defendants; (iii) damages on the basis of a conspiracy by all the defendants to obtain information from the plaintiffs and

thereafter to utilise the information to manufacture a product identical or similar to the plaintiffs' product by using a trade mark similar to the plaintiffs' trade mark; and (iv) damages in conversion. The defendants argued, inter alia: (i) that the plaintiffs had nothing to protect by way of a patent, thus they had nothing to protect by way of an action based on breach of confidence; (ii) the information imparted prior to the execution of the confidentiality agreement was not imparted under any obligation of confidence; (iii) a mere distributor, such as the second plaintiff, may not acquire proprietary rights sufficient to sustain an action in passing off; (iv) the cause of action of conversion in respect of intellectual property rights is misconceived as it does not relate to ethereal or ephemeral matter such as information; and (v) proof of actual damage is a necessary ingredient at trial and only in the case of an interim application for a quia timet injunction would the likelihood of damage suffice. Held, allowing the plaintiffs' claims: (1) The first defendant, through its employees, had breached the confidentiality agreement not to use any part of the information provided to it in any manner whatsoever to its competitive advantage. It was also clear that the second defendant had divulged to the defendants for their use and benefit confidential information and trade secrets with regard to the plaintiffs' product. A director, such as the second defendant, is precluded from using any advantage obtained by virtue of his position as a director, especially with regard to confidential information obtained, after he resigns, more so when his resignation is seen to have been motivated by a desire to obtain for himself the advantage actually sought by the company. The second defendant was also in breach of his fiduciary duties not to obtain a business advantage over the second plaintiff and for which he had been negotiating on behalf of the second plaintiff. Thus, the plaintiffs were entitled to an order for an injunction against the second defendant together with damages as prayed for (see p 440F-G).Even in the absence of an agreement, the first and second defendants owed an equitable obligation to the second plaintiff in relation to confidential information they received in their 1998 3 MLJ 422 at 424 capacities as consultant and director of the second plaintiff respectively. The second defendant was privy to all, if not most, of the confidential information by virtue of his position as the director of the second plaintiff. The information was used by the defendants in the design, manufacture, marketing and promotion of the 'Stopcar' product. Such use by the defendants amount to a breach of confidential information (see p 440H-I). (2) A claim to confidential information does not mean the information must pass the patent test. It is only necessary to show that the information is confidential and cannot be found in the public domain. Patents give protection only for 15 years, after which the public is free to exploit it, whereas a trade secret can remain a trade secret forever and is protected forever (see p 445D). (3) Information although imparted before the execution of the confidentiality agreement was imparted under an obligation of confidence as it was imparted during negotiations. The need for confidence must be implied and must exist throughout the period of negotiations (see p 445GH). (4) The law of passing off is essentially concerned with the protection of the goodwill associated with a business. Actual trading itself is not crucial in order to create goodwill. In this case, the second plaintiff has in fact extensively advertised its product by use of the name 'Stopcard' prior to its launch and also subsequent to its launch. By virtue of this extensive advertising campaign, the second plaintiff has generated goodwill in its name 'Stopcard' albeit in a short time, in relation to anti-car theft devices. It may be concluded that the second plaintiff owns the goodwill in Malaysia jointly with the third plaintiff (see pp 446E, G, I and 447B, C).Furthermore, the

second plaintiff is not merely a conduit for the manufacturer. Among others, the second plaintiff developed the operational system of the product in Malaysia and owns the intellectual property rights with regard to this system. It was clear that the second plaintiff is the first to use the trade mark 'Stopcard' in Malaysia in respect of this changed product and thus owns the goodwill in the trade mark in Malaysia (see p 447G, I) Hai-O Enterprise Bhd v Nguang Chan; Liquor Trader (a firm, intervening) [1992] 4 CLJ 1985 distinguished.Thus, the adoption by the defendants of the trade mark 'Stopcar' in relation to a product identical to the plaintiffs was done with the intention of appropriating the second plaintiff's goodwill and to pass off the defendants' product as that of the second plaintiff's (see p 448H-I). (5) There is no need to specifically plead 'sole and/or predominant purpose' in the reamended statement of claim as it is only necessary to so plead if the plaintiffs have alleged conspiracy by acts which are lawful. If the conspiracy is based on all or any of 1998 3 MLJ 422 at 425 the unlawful acts as stated herein, namely, passing off, conversion, breach of fiduciary duties and breach of confidentiality, is not necessary to plead 'sole and/or predominant purpose'.In this case, the evidence showed that there was a conspiratorial grand design by all the defendants to usurp the goodwill and business of the plaintiffs by launching a product similar to or identical with the product of the plaintiffs to cash in on the lucrative anti-car theft alarm system. The plaintiffs had also suffered damage in the loss of its monopoly of the market. Therefore, it was held that the defendants did conspire to injure the plaintiffs (see pp 449I and 450F-G). (6) Due to the rapid and highly volatile revolution in technology and with the concept and subsequent incept of the Multi Media Super Corridor, the courts must take a broader view of the meaning of property and include information as such. Confidential information falling within intellectual property should be accepted for the purposes of giving rise to an action in conversion. The submission of the defendants that there must be deprivation of use or possession of property before an action for conversion can emerge, is unattractive. A mere dealing with property in a way inconsistent with the rights of the owner is sufficient. From the evidence, it was clear that the defendants had without authority taken possession of the plaintiffs' property with the intention of asserting a right over it (see p 451A-C). (7) The plaintiffs do not have to prove actual damages. The very likelihood of damage is sufficient. One of the ways in which the goodwill of a business or its reputation is injured is by way of appropriation by another person of the plaintiffs' goodwill and reputation. The use by the defendants of the trade mark 'Stopcar' which is very similar to that of the plaintiffs' 'Stopcard' trade mark is an appropriation of Stopcard's goodwill. There is also a likelihood of damage to the plaintiffs' reputation if the defendants' product has any shortcomings which said shortcomings will be attributed to the plaintiffs, due to the confusion ensuing out of the similarity of the trade marks. In any event, actual damage has been shown (see p 452I and 453A-B). Obiter: (1) It is obvious that a patent can only be applied for in respect of a new product involving an inventive step. It is a requirement that in a patent document, prior art has to be disclosed in that all existing products which are similar in the market have to be disclosed. The patent must then state what is inventive about the product to set it apart from the prior art. It is significant to note that in the defendant's patent document, the 'Stopcard' product was not mentioned. The allegation that prior art is based on 1998 3 MLJ 422 at 426 patented product is rejected. Section 14 of the Patents Act 1983 defines prior art as everything disclosed to the public anywhere in the world and this means that all inventions which the party

filing the patent is aware of, must be stated. Therefore, the first defendant had deliberately failed to disclose the 'Stopcard' product (see p 436C-D). (2) The effect of the 'springboard' doctrine is that it is open to the court to restrict the use of the plaintiff's information for such time as it is reasonable to expect the defendant to have used its own labour and skill to produce the same information, possibly by way of reverse engineering. In this case, since the evidence of PW1 showed that it is not possible to reverse engineer the product because the idea is in the chip, the court is constrained to hold that the principle of springboard doctrine cannot assist the defendants herein (see p 444I). 36) PEKAN NENAS INDUSTRIES SDN BHD v CHANG CHING CHUEN & ORS[1998] 1 MLJ 465 The appeal concerned a dispute over ownership of lands ('the disputed properties'), the result of a breakup of a Singaporean family and the ensuing power struggle to control the Family Company by opposing factions, one lead by the Father and his Second Wife Rahimah, and the other lead by the Mother and her children. The Father was the Chairman and Managing Director of the Family Company. The Mother was a director and the Secretary of the Family Company. In 1973, the disputed properties were transferred to the Family Company by the Father. The Father also caused the Family Company to allot shares in it to each child, but he also obtained from each child a signed but undated transfer form in blank which he held with all the relevant share certificates. Prior to her marriage to the Father, the Second Wife Rahimah was made a director of the Family Company in 1989, and was a substantial shareholder in the company since 20 April 1988. In March 1988, the Father incorporated a company called Rahimah Dollah Holdings Sdn Bhd ('RDH'). From December 1989 to May 1990, the Father transferred funds exceeding RM600,000 from the Family Company account to RDH and it would appear that there was no proper resolution by the Family Company's board authorizing the transfer. 1998 1 MLJ 465 at 466 The family fight commenced in April 1990 when the Father decided to marry the Second Wife Rahimah. The Father left the family home in Singapore without leaving a forwarding address. Unbeknown to the Mother and children, the Father married the Second Wife Rahimah in Thailand according to Muslim law. On 17 April 1990, the Family Company held a board meeting in Singapore, which was attended by the Mother and one of the children, Peter. At the board meeting, it was resolved that the Second Wife Rahimah's share certificates be declared null and void and those share certificates would be given new serial numbers and be transferred to some of the children of the family. The Second Wife Rahimah ceased to be a director of the Family Company, and three children of the family were appointed to the board as directors. The Mother continued to be the Secretary. On 10 and 26 May 1990, two board meetings were held. The first meeting removed the Father as Managing Director and three new Managing Directors were appointed. The second meeting resolved that the disputed properties belonging to the Family Company were to be sold, and the Managing Directors were given the authority to sell the disputed properties and were given authority to execute under seal all relevant documents to give effect to any sale. On 6 September 1990, the Father registered the First Caveat against the disputed properties. The statutory declaration in support of the First Caveat stated that he was the Managing Director and Chairman of the Family Company, and that the title deeds to the disputed properties were lost or mislaid or taken away by unauthorized persons and hence the caveat was lodged to prevent unauthorized dealings with the disputed properties.

Meanwhile, the Purchaser/Intervener's Managing Director, Dato Tan dealt with a broker in respect of the sale and purchase of the disputed properties. He did a search at the Companies Register, and according to Form 49 dated 19 April 1990, the Mother and Peter were both directors of the Family Company, and the former was also the Secretary. He learned of the First Caveat through his solicitors, who advised him that the caveat had been lodged on the grounds of the title deeds being missing and was advised that removing the caveat should not be a problem. The Mother confirmed that she had the title deeds to the disputed properties, a fact later shown to be true. The initial price quotation for the disputed properties was RM6m but was later negotiated down to RM4.8m, and an option to purchase was then granted to Dato Tan by the Mother at RM4.8m. The consideration for the option was payment of RM100,000 in cash in Singapore. The Mother, on behalf of the Family Company, duly acknowledged receipt of the cash. On 8 November 1990, the Purchaser/Intervener 1998 1 MLJ 465 at 467 sent a cheque for RM568,000 as part of the purchase price along with a draft agreement. The Purchaser/Intervener registered a caveat against the disputed properties to protect its interest pending completion. On 1 December 1990, the board of the Family Company held a meeting in which the sale of the disputed properties was acknowledged. It was resolved that any two directors, or one Director and the Company Secretary were authorized to execute all relevant documents on behalf of the Family Company, and that the common seal of the Family Company be affixed to all relevant documents relating to the sale in accordance with the Articles of Association of the Family Company. On 3 December 1990, the Family Company and Dato Tan executed the formal sale and purchase agreement for the disputed properties. The purchase price was RM4.8m. The common seal of the Family Company was placed on the instruments of transfer, and signatures of the Mother and Peter witnessed the transfer. On 8 December 1990, the common seal of the Purchaser/Intervener had been affixed on the documents. Dato Tan commenced works on improvement on the disputed properties. On 29 December 1990, the Second Caveat was registered, and stated that the Father was the Managing Director of the Family Company. By an extraordinary general meeting held on 11 July 1990, it was resolved that he be reappointed as the sole Managing Director of the Company, that his shareholder children were holding the majority shares in trust for him, as evidenced by the transfer forms in his favour. He said that he was concerned that the other shareholders were trying to dispose of the disputed properties without his knowledge, consent or approval. He thus had lodged the Second Caveat to protect his personal interest and the corporate interest of the Family Company. The Purchaser/Intervener learned of the Second Caveat through its solicitors in early 1991, who again advised that there should be no problem removing this caveat. On the advice of its solicitors, in February 1991, the balance of the purchase price was paid to the Family Company, to avoid forfeiture of the initial deposit under the terms of the sale and purchase agreement. After payment, the Purchaser/Intervener discovered the caveat was still subsisting, and the balance of the money was returned. Arguments and explanations ensued between the Mother and Dato Tan where the former explained that she had the title deeds and undertook to remove the caveat. The Father and the Second Wife Rahimah subsequently commenced an action in the High Court to stop the sale of the disputed properties, by seeking a declaration nullifying the meeting of the board of the Family Company held on 17 April 1990 on the grounds of non-notice and non-receipt of the agenda. The Father and the Second Wife Rahimah also contended that the Purchaser/Intervener conspired with the Mother and her faction. The Purchaser/Intervener was given leave to intervene, although was never joined as a co-plaintiff

1998 1 MLJ 465 at 468 or co-defendant to the proceedings and never obtained leave of the court to file the necessary pleadings. The Father and the Second Wife Rahimah succeeded in getting the 17 April 1990 meeting nullified, which amongst other things, resulted in the sale of the disputed properties being set aside. It was decided that the Purchaser/Intervener was not involved in any conspiracy with the Mother and her faction, but nevertheless, was not a bona fide purchaser for value and could not rely on the rule in Turquand's case (see [1995] 2 MLJ 43). The Mother and her faction appealed as did the Purchaser/Intervener. The Court of Appeal, dismissed the appeal stating that the judge in the High Court decision 'was entirely correct in the decision he reached' (see [1995] 2 MLJ 770). The Purchaser/Intervener appealed against the decision to the Federal Court, basing its appeal on the grounds that the Court of Appeal and the High Court had erred in law by concluding that the Purchaser/Intervener was not a bona fide purchaser for value, advancing the following submissions: (1) The rule in Turquand's case does not cast a duty upon an outsider contracting with a company to conduct an investigation as to the capacity of the company officials dealing with him other than to rely on what is disclosed in the company's documents, namely Form 49 and the Memorandum and Articles of the Family Company; (2) The rule in Turquand's case relates to the doctrine of constructive notice provided in documents such as Form 49 and the Articles of Association which are compulsory documents filed by companies with the Registry to constitute public notice of the authorized officials of the company and its powers to contract, relying on KL Engineering Sdn Bhd & Anor v Arab Malaysian Finance Bhd [1994] 2 MLJ 201; (3) A third party was entitled to rely on a company resolution which is ex facie valid without having to investigate the legality or otherwise of the adoption of the said resolution; (4) The Articles of the Family Company did not restrict the contracting power of the company officials so that it could not be said that only the Managing Director, ie the Father, could sign on behalf of the Family Company or be necessarily involved in all its contracts; (5) That issues in this case must be examined realistically with regard to the prevailing state of affairs within the Family Company, including the breakup and the unauthorized transfer of funds out of the Family Company into RDH; (6) That having found no conspiracy, the Court of Appeal erred in law in drawing a conclusion merely by inference that the Purchaser/Intervener was not or could not be a bona fide purchaser; 1998 1 MLJ 465 at 469 (7) That the Court of Appeal erred in law by concluding that one is not a bona fide purchaser until the full purchase price has been paid; (8) The Court of Appeal had further erred in law by holding or misapplying the rule that knowledge of the solicitor is deemed to be knowledge of the client in the present situation where it invoked to disqualify the client from being a bona fide purchaser; and (9) That the knowledge alone of an adverse unregistered interest does not make the purchase and the registration thereof impugnable under the Torrens system of land registration, relying on Waimiha Sawmilling Co Ltd (In liquidation) v Waione Timber Co [1926] AC 101.

The Father argued, inter alia, that the rule in Turquand's case was inapplicable in the present case since the Purchaser/Intervener had actual notice of the family's dispute by virtue of the statutory declarations filed with the Father's caveats, and thus knew that the sale was unauthorized. He also argued that the Purchaser/Intervener, notice, did not check the Memorandum and Articles of Association of the Family Company until 15 March 1991, three months after the sale and purchase agreement was signed. After the hearing before the Federal Court and while judgment was pending, the Father raised two new points by way of supplementary written submission; the first being that the appeal should be dismissed because of a procedural irregularity in that the Purchaser/Intervener had never been joined as a party to the proceedings, the evidence adduced on behalf of the Purchaser/Intervener was unsupported by the pleadings and the court had a duty to decide the case on the issues disclosed in the pleadings. The second point being, having regard to the findings of the High Court and the Court of Appeal, that the relevant instruments of transfer were 'insufficient or void' within the meaning of s 340(2)(b) of the National Land Code 1965 ('the NLC'). Held, the appeal: (1) The High Court and the Court of Appeal erred in law by concluding that the rule in Turquand's case did not apply. The rule protects outsiders dealing with the company in good faith who are entitled to assume that acts within its constitution and powers have been properly performed, and are not bound to inquire whether acts of internal management have been regular. The rule gives rise to an irrebuttable presumption, that the company concerned is debarred from establishing or relying on the fact that the proceedings were irregular or unauthorized (see pp 505G and 507F); Royal British Bank v Turquand (1856) 119 ER 886, County of Gloucester Bank v Rudry Merthyr Steam and House Coal Colliery Co [1895] 1 Ch 629, Browne v 1998 1 MLJ 465 at 470 La Trinidad (1888) 37 Ch D 1 followed; South London Greyhound Racecourses Ltd v Wake [1931] 1 Ch 496 not followed.In the present case, the High Court and the Court of Appeal placed great emphasis on the fact that the meeting of the board of the Family Company on 17 April 1990 was invalid by reason of lack of notice to the Father and the Second Wife Rahimah, and both courts concluded that the irregularities with this first meeting made void all subsequent meetings, including the sale to the Purchaser/Intervener. However, at the time of the execution of the sale and purchase agreement dated 3 December 1990, unless there was proof that the Purchaser/Intervener knew or ought to have known of the irregularities with regard to the 17 April 1990 meeting, it was difficult to see how the Purchaser/Intervener's contention that it was entitled to rely on the rule in Turquand's case could have been rebutted. The irregularities had taken place in the internal management of the company, and the Purchaser/Intervener, as an outsider had no knowledge actual or constructive and no means of discovering the same (see pp 506F-I, 507A-C and 510C); Browne v La Trinidad (1888) 37 Ch D 1, Mahony v East Holyford Mining Co (1875) LR 7 HL 869, Morris v Kanssen & Ors [1946] AC 459, Kanssen v Rialto (West End) Ltd & Ors [1943] Ch 346 followed; First Nominee (Pte) Ltd v New Kok Ann Realty Sdn Bhd & Anor [1983] 2 MLJ 76 distinguished. (2) The rule in Turquand's case cannot be invoked if the outsider relying on the rule knows or ought to have known that there is an irregularity. The material time at which there must be knowledge or the means of knowledge is the time of entry into the transaction, in this case, 3 December 1990. The outsider thus bears the burden of showing that he is not disqualified from invoking the rule. The Court of Appeal, in deciding the rule in Turquand's case did not apply, relied on certain circumstances which it considered must have put Dato Tan, who represented the Purchaser/Intervener, 'on inquiry' and thus wrongly concluded he failed to make the necessary inquiries. In this case, the evidence supported the Purchaser/Intervener's contention that it was

entitled to rely on the rule in Turquand's case (see pp 507F-G, 508D and 517D); Royal British Bank v Turquand (1856) 119 ER 886, Howard v Patent Ivory ManufacturingCo (1888) 38 Ch D 156, B Liggett (Liverpool) Ltd v Barclays Bank Ltd [1928] 1 KB 48, Morris v Kanssen & Ors [1946] AC 459, Irvine v Union Bank of Australia (1877) 2 App Cas 366, Kanssen v Rialto (West End) Ltd & Ors [1943] Ch 346, Howbeach Coal Co Ltd v Teague (1860) 5 H & N 151, Garden Gully United Quartz Mining Co v McLister (1875) 1 App Cas 39 and Ninety-Five Pty Ltd v Banque National de Paris [1988] WAR 132 followed. 1998 1 MLJ 465 at 471 (3) The Court of Appeal felt the irregularities in the address in the sale and purchase agreement, coupled with knowledge of the Father's First Caveat and the contents of the statutory declaration filed in support thereof should have put Dato Tan on notice from the very beginning. Whether or not the Purchaser/Intervener was put on notice is a question of fact. Concerning the address, it was noted that Dato Tan was not cross-examined on this point, nor was anyone else. If there had been such cross-examination, the witness may have had a satisfactory explanation. As for the First Caveat, the Court of Appeal was correct in stating that it constituted notice to the world at large of its contents. The First Caveat raised a doubt regarding a possible abuse of power, and in such a situation, duty cast upon the Purchaser/Intervener was not to ascertain whether the transaction was in fact regular but merely to neutralize the circumstances of suspicion, that is, investigate whether the Mother and Peter had authority to act on behalf of the Family Company. Dato Tan's inquiries did neutralize the suspicion raised by the First Caveat. He sought legal advice, according to which there would be no difficulty in removing the caveat. He had also inquired directly with the Mother, the Family Company's Secretary, as to the whereabouts of the title deeds, who affirmed that she had the title deeds. The supporting affidavit to the caveat, registered by the Father, only complained that the title deeds were missing, and hence, Dato Tan's actions were sufficient to discharge his duty (see pp 517I and 518A-C, F); Howard v Patent Ivory Manufacturing Co (1888) 38 Ch D 156, Morris v Kanssen & Ors [1946] AC 459, Irvine v Union Bank of Australia (1877) 2 App Cas 366, Ninety-Five Pty Ltd v Banque Nationale de Paris [1988] WAR 132, KL Engineering Sdn Bhd & Anor v Arab Malaysian Finance Bhd [1994] 2 MLJ 201, AL Underwood Ltd v Bank of Liverpool [1924] 1 KB 775, Osmanoski v Rose [1974] VR 523 followed; J & H Just (Holdings) Pty Ltd v Bank of New South Wales (1971) 125 CLR 546 distinguished. (4) The Purchaser/Intervener was entitled to rely on the rule in Turquand's case because prior to signing the sale and purchase agreement, the Purchaser/Intervener relied on two documents: Form 49 dated 19 April 1990 and the director's resolution dated 26 May 1990 authorizing the sale to the Purchaser/Intervener. In Form 49, the Mother and Peter were both directors of the Family Company, the former also being the Secretary. Thus the Purchaser/Intervener was entitled to rely on the contents of Form 49 and had every reason to suppose that it was dealing with authorized persons of the Family Company. As for the director's resolution, even if the Mother and Peter were not actually authorized persons, the resolution would nevertheless amount to a representation by the Family Company upon which an estoppel may be based. The Court of Appeal put too 1998 1 MLJ 465 at 472 high a duty on the Purchaser/Intervener by holding that Dato Tan had a further duty to ascertain whether the transaction was regular (see pp 518D, H-I and 519D-E). (5) The Court of Appeal wrongly concluded that Dato Tan did not receive the relevant resolutions until after payment of the balance of the purchase price by relying on affidavit evidence from Dato Tan, which was filed in support of his application to remove the injunction restraining dealings with the disputed properties. There was no cross-examination of Dato Tan on this

point, even though he appeared as a witness for the Purchaser/Intervener. The Court of Appeal wrongly concluded that the affidavit was evidence of an admission, and hence there was no need to put those contents to Dato Tan in cross-examination. It was unfair to have denied Dato Tan the opportunity to explain his affidavit. It was a misdirection of the Court of Appeal to have relied on the affidavit of Dato Tan as constituting an admission, and in concluding, as a result, that the Purchaser/Intervener had acted imprudently by not calling for the resolutions at the very outset. The Court of Appeal was wrong to have rejected evidence of contemporary correspondence, to wit, the letter dated 8 March 1991 from the Family Company solicitors to the solicitors of the Purchaser/Intervener which indicated that the resolutions had been sent long before the payment of the balance of the purchase price (see pp 514G-I and 515A, G-H); Allied Pastoral Holdings Pty Ltd v FC of T (1983) 44 ALR 607, Earle's Utilities Ltd v Jacobs (1934) 51 TLR 43, Brier v Evison (1884) 26 Ch D 238, Campbell v Rothwell (1877) 38 LT 33 and Re Cohen, ex p Trustee [1924] 2 Ch 515 followed. (6) It is difficult to see the justification for invoking the presumption under illustration (g) of s 114 of the Evidence Act 1950 against the Purchaser/Intervener for having failed to called the brokers; the brokers's testimony was an omission, not a withholding of testimony. On the contrary, the Purchaser/Intervener was entitled to rely on the contemporary documents, to wit, the sale and purchase agreement and the memoranda of transfers of the disputed properties to invoke the presumption contained in illustration (f) of s 114 of the Evidence Act 1950 for the purpose of establishing the true price paid for the disputed properties. A court may presume the apparent to be the real unless the contrary is proved. Hence, the Purchaser/Intervener was entitled to contend that the purchase price was RM4.8m based on the affirmative testimony of its solicitor, Dato Tan and the Mother. The Father had the burden of proving the purchase price was RM6m, and he might have succeeded had he called the solicitor for the vendor, or even the brokers, but the Father did not adduce such evidence (see pp 519H-I and 520A-H); Suruchi Bala & OrsvSuruchi Bala Deb & Ors AIR 1976 Gau 92 followed. 1998 1 MLJ 465 at 473 (7) The Court of Appeal's inference drawn from cl 10 of the sale and purchase agreement was mere surmise or conjecture and went nowhere near to rebutting the presumption under s 114(f) of the Evidence Act 1950. There was affirmative testimony from the solicitors of the Purchaser/Intervener, the Mother and Dato Tan as to the purchase price. Thus, it is difficult to agree with the Court of Appeal's conclusion that the purchase price of RM4.8m was understated, especially in view of the finding that there was no basis for a case of conspiracy against the Purchaser/Intervener see p 521B-D). (8) The Court of Appeal's criticism of Dato Tan for paying RM100,000 in cash in Singapore on 26 October 1990 for the purchase of the option and obtaining only a personal receipt from the Mother was unjustified. The receipt showed that the Mother signed on behalf of the Family Company, and that criticism of the cash payment was unduly severe, especially since the Court of Appeal had absolved Dato Tan of the conspiracy charges.Also, the Court of Appeal's criticism of Dato Tan for not taking the precaution of calling for a resolution confirming that the Mother had the authority to act on behalf of the Family Company and effect the sale of the disputed properties before paying her RM100,000 was not justified. Although it would have been prudent for Dato Tan to have done so, there was no legal requirement for this at such an early stage of the transaction (see p 521D-H). (9) While it was unusual for Dato Tan to have been given vacant possession of the disputed properties so quickly, the finding of the Court of Appeal that there was no conspiracy neutralized suspicions which early possession might raise. Moreover, Dato Tan had paid a sum appreciably

more than the conventional deposit in a purchase and sale transaction for the disputed properties, and his company owned adjoining lands. Just because the Mother and her faction were willing to give vacant possession at such an early stage was insufficient to put Dato Tan on inquiry as to their authority to effect the proposed transaction (see pp 521I and 522A-B). (10) The criticism of Dato Tan's execution of the transfers of the disputed property on behalf of the Purchaser/Intervener at a time before its incorporation as 'undue haste' was not justified. Again, there was no conspiracy, and pre-incorporation transactions are an inevitable feature of many new corporations and anything sinister should not be read into them (see p 522C-E). (11) The unusually large deposit paid by Dato Tan was also unjustly criticized. While the usual deposit is 10% of the price, Dato Tan's explanation of the choice of the odd sum as being lucky, while not impressive to the Court of Appeal, was one which was difficult to rebut (see p 522F-H). 1998 1 MLJ 465 at 474 (12) Dato Tan's explanations of the vendor's apparent sincerity, the fact he had spent so much money improving the disputed properties plus advice from his solicitors were in no way improbable. The Court of Appeal misread the evidence and the Court of Appeal's criticism of the fact that Dato Tan had paid the full balance after the Second Caveat had been lodged by the Father was unjustified (see p 523E-I). (13) While there was a lack of prudence and a breach of the taxing statute on Dato Tan's part, these matters were irrelevant for the purpose of determining whether he could invoke the rule in Turquand's case (see p 524D). (14) The issue of whether mere knowledge of an unregistered claim or interest does not amount to fraud within the meaning of s 340(2)(a) the NLC, relates to the issue of whether the Purchaser/Intervener, after entering into the agreement but prior to paying the full purchase price, discovered the Second Caveat. In order to answer this question, it is only necessary to consider what would have happened had the transfers of the disputed properties in favour of the Purchaser/Intervener been duly registered and an attempt were made by the Family Company to challenge the registered title of the Purchaser/Intervener.In such a situation, the Father and his faction could only succeed by establishing any one of the exceptions to indefeasibility provided under s 340(2) of the NLC, the only relevant one being s 340(2)(a), which provides that in any case of fraud which the person or body, was a party or privy, title or interest of such a person or body shall not be indefeasible. 'Fraud' under this section means actual fraud or dishonesty, not constructive or equitable fraud. The effect of notice of an unregistered interest may not amount to fraud depending on whether it is demonstrated that there has been a deliberate and dishonest attempt to deprive the unregistered claimant of his claim or interest therein. Since Dato Tan completed the transaction by payment of the balance of the purchase price only after obtaining legal advice that he could do so and to ensure that whatever payment was made to get an official receipt, it could not be said that he acted dishonestly. If this be the legal position, had the transfers of the disputed properties been registered, then there is no reason in principle why if those transfers could not be registered because the disputed properties had been wrongly injuncted, the legal position should be any different (see pp 525E-I and 529A-E); Assets Co Ltd v Mere Roihi & Ors [1905] 1 AC 176, Waimiha Sawmilling Co Ltd (In liquidation) v Waione Timber Co Ltd [1926] AC 101 Goh Hooi Yin v Lim Teong Ghee & Ors [1990] 3 MLJ 23, Lai Soon Cheong v Kien Loong Housing Development Sdn Bhd [1993] 2 CLJ 199, Bunt v Hallinan [1985] 1 NZLR 450, Fels v 1998 1 MLJ 465 at 475

Knowles (1906) 26 NZLR 604 and Loke Yew v Port Swettenham Rubber Co Ltd [1913] AC 491 followed. (15) In considering the question whether the Purchaser/Intervener was entitled to rely on the doctrine of the bona fide purchaser for value, it is up to the Purchaser/Intervener to prove that it is a bona fide purchaser. The Court of Appeal made reference to s 26(a) and (b) of the Specific Relief Act 1950, and applied s 26(b) to the present case, by analogy, and in consequence followed the Indian cases Sinna Ponnu and Vomisetti which held that a purchaser was not a bona fide purchaser for value because the full purchase price had not been paid. Although the Court of Appeal was careful to preface its observations as regards this part of the case by saying that the Indian cases relied on in no way influenced its decision, it is necessary to point out that the court was unable to approve those observations. Statutory provisions cannot be used to interpret a principle of general law. If in cases such as the present, recourse were had to cases under the Indian equivalent of our s 26(b) of the Specific Relief Act 1950 in considering who is a bona fide purchaser for value, the rule in Turquand's case could be deprived of much of its vitality in situations such as the present. When, as in here, the question arises whether a person dealing with a company has contracted in good faith, there is no qualification on the definition of purchaser; all that is necessary is that he should have contracted in good faith and have given value. For this purpose, the common law definition of who is a bona fide purchaser is applicable. When there is a dispute between the immediate parties to a sale and purchase transaction, a bona fide purchaser is not necessarily one who has paid the full purchase price. Much will depend upon the particular circumstances of each case (see pp 529G-I, 530A-I and 531A); Ong Chat Pang & Anor v Valliappa Chettiar [1971] 1 MLJ 224, Bhup Narain Singh vGokhul Chand Mahton LR 61 IA 115, Northside Developments Pty Ltd v Registrar-General (1990) 170 CLR 146, Hunt v Fripp [1898] 1 Ch 675, Re Bennett, ex p The Official Receiver [1907] 1 KB 149 followed; Sinna Ponnu v Singaru Odayar [1969] 2 Mad LJ 358 and Vomisetti Paparao v Jonnada Venkataramana [1970] 2 An WR 280 distinguished. (16) With regard to the two new points raised in the written submission: (a) As to the point that the relevant transfer instruments were insufficient, as this was a new point of law raised for the first time, which was not even raised before the court during the hearing, the court refused to consider it, following the practice of the Privy Council. Even if the court did consider this point, it was without substance. If the Purchaser/Intervener was entitled to rely on the rule in Turquand's case, it matters not 1998 1 MLJ 465 at 476 one bit that the instruments of transfer were 'void or insufficient' (see p 516G-I); Keng Soon Finance Bhd v MK Retnam Holdings Sdn Bhd & Anor [1989] 1 MLJ 457 and United Marketing Co v Hasham Kara [1963] 1 WLR 523 followed. (b) As to the point that there was a failure to join the Purchaser/Intervener as a party to the action, the Court of Appeal was correct in determining that notwithstanding the procedural errors, the trial Judge had taken the proper course, and that it was too late for the Father to argue that the Purchaser/Intervener be penalized for not having applied to be added as a party and to deliver a pleading. Given the history of the proceedings and the circumstances of this case, the Father's contention was quite untenable. Had this point been raised at trial, the Purchaser/Intervener could have made an appropriate application for leave to be added as a party and to deliver a pleading (see pp 504G-I and 505A).

37) LARUT CONSOLIDATED BHD & ANOR v KHOO EE BEE & ORS[1997] 5 MLJ 77
The plaintiffs were housing developers. The first and second defendants secured or purported to secure a lottery project in the Jilian province of China. The project was to be operated jointly by their company, Golden Glory International Management Services Ltd Hong Kong ('GGIMS') and the Social Welfare and Charity Foundation of Jilian Province. The third defendant was the wife of the second defendant. The fourth defendant was the personal assistant to the group chief executive of Magnum Corp Bhd whereas the fifth defendant was the former chief executive director of Leisure Management Bhd. The defendants offered GGIMS to the plaintiffs as a vehicle to exploit the lottery project and invited the plaintiffs to buy the controlling shares in GGIMS for a sum of US$5m with an additional US$5m as procurement fees to the defendants. The first and third defendants signed a commitment agreement with the plaintiffs on 4 February 1993 wherein the plaintiffs agreed to inject US$22m into GGIMS of which US$5m was to be paid to the first and third defendants as procurement fees. The plaintiffs had also expended more than US$12m in a purchase of a building in Changchun and computers and related equipment through GGIMS. The lottery project, however, was prohibited by the Government of China in March 1993 and this was communicated to the defendants who did not disclose the prohibition to the plaintiffs. The said US$5m was paid to the defendants as procurement fees in March, April and May 1993 and the defendants collected the same despite knowing that the lottery had been prohibited by the Government of China. The plaintiffs only knew of the prohibition in December 1993. GGIMS was subsequently renamed Larut Talam International Services Ltd ('LTI'). The plaintiffs had obtained by way of an ex parte application a Mareva injunction by an order of court dated 11 June 1996. The present application heard inter partes was for the Mareva injunction to be extended until the trial of this action. The plaintiffs alleged that the defendants in wrongful conspiracy with each other conspired to defraud the plaintiffs thereby causing loss and damage to the plaintiffs. The defendants in seeking a discharge of the ex parte Mareva injunction argued, inter alia, that: (i) there was a delay of over three years before the plaintiff sought redress from the court; (ii) there was suppression of materials facts by the plaintiff in the form of non-disclosure of a document; and (iii) the ex 1997 5 MLJ 77 at 78 parte order granted was oppressive as it failed to make provisions for the defendants' living expenses and to provide an accurate maximum limit where the plaintiff sought an exact sum. Held, discharging the ex parte Mareva injunction but granting a fresh inter partes Mareva injunction limited to the sum of US$5m: (1) The mere act of delay, even if there was, was not per se a factor which militated against the granting of an injunction. The facts of each case must be looked into. For delay to operate as a bar, it was essential that it should prejudice the defendants. From the facts of the case, in no way whatsoever were the defendants disadvantaged by the delay. The plaintiffs had raised sufficient evidence to warrant the grant of the ex parte Mareva injunction. The plaintiffs had also satisfactorily explained the delay in that their main cause of action was the tort of conspiracy which ought to be pleaded with great particularity and required sufficient evidence (see p 95BE). (2) Order 29 r 2A of the Rules of the High Court 1980 was introduced for a specific purpose and with specific reference to ex parte applications. The need for full and frank disclosure at the ex parte stage had been enshrined in the rules and they must be strictly complied with by the parties and enforced by the courts. The plaintiffs had indeed breached this rule by failing to disclose the existence of a letter whereby the parties had agreed that out of the

US$17m that was to be used for the acquisition of assets or working capital, a sum of US$5m was to be paid back to one DatO' Chan, who signed on behalf of the plaintiffs, or to his nominees (see p 97E). (3) The minutes of the 1996 annual general meeting of LTI held on 10 June 1996 showed that the board of directors of LTI had agreed to dispose of LTI to a third party in order to raise funds to repay its creditors and advances from major shareholders. The minutes also expressed the fact that the board of directors of LTI had, prior to the annual general meeting, already approved the sale. As the Mareva injunction was granted on 11 June 1996, disclosure of these minutes ought to have been made to the court (see p 98B D); Creative Furnishing Sdn Bhd v Wong Koi [1989] 2 MLJ 153 followed. (4) The Mareva injunction granted was oppressive as the order failed to make provisions for the fourth defendant's living expenses and legal costs and it also overstated the maximum monetary limits of the injunction's intended coverage. It was sound law that a failure to provide for living expenses and for payment of ordinary debts as they become due in an order for a Mareva injunction ought to be valid grounds to discharge that order (see p 100AD); Law Society v Shanks The Times 19 October 1987 [1987] NLJ Rep 1016 and Derby v Weldon (Nos 3 & 4) [1990] Ch 65 followed. 1997 5 MLJ 77 at 79 (5) Furthermore, in a case where the amount of the claim had been quantified, it was necessary for the order of the court to sufficiently identify the upper limit of the sum that was sought to be protected by the injunction and where a maximum limit was provided for, the maximum limit must, as far as possible, be accurately stated and in any event, certainly not overstated. In the present case, the Mareva injunction order stipulated a maximum monetary limit of RM54m (US$22m) and the plaintiffs' application to continue the injunction made no attempt to reduce this sum. This was a gross overstatement of the exact sum claimable by the plaintiffs by way of special damages in so far as the plaintiffs had failed to disclose the sale which would have reduced this sum to approximately RM9.6m only (see p 101CD) ; Motor Sports International Ltd (servants or agents at Federal Territory of Labuan) & Ors v Delcont (M) Sdn Bhd [1996] 2 MLJ 605 followed. (6) In the light of the evidence adduced and the non-disclosure of material facts by the plaintiffs, the ex parte injunction granted on 11 June 1996 should be discharged and an enquiry as to damages should be heard after the trial (see p 101I). (7) There was, however, sufficient evidence before the court that there was a real risk of the defendants dissipating their assets. The plaintiffs had paid out RM5m to the defendants who admitted receipt of this sum. The plaintiffs were public listed companies and the funds were that of the shareholders. It was necessary, notwithstanding the conspiracy or fraud or corrupt practices of the parties to this action, that the funds of the investors be protected. Therefore, a fresh Mareva injunction should be granted against the defendants, limited to the sum of US$5m (see p 102AC).

38) ELECTRO CAD AUSTRALIA PTY LTD & ORS v MEJATI RCS SDN BHD & ORS[1998] 3 MLJ 422 The first and third plaintiffs both are companies incorporated in Australia were the owner of the intellectual property rights in the Stopcard Auto Theft Device ('Stopcard'). The second plaintiff was incorporated in Malaysia to market the product in Malaysia. The plaintiffs claimed

that the defendants' device ('Stopcar') derived from the Stopcard. The third plaintiff had earlier entered into a licence agreement ('the licence agreement') with a company of which the second defendant was a director. The second defendant later became a director of the second plaintiff. Pursuant to this, confidential information pertaining to the Stopcard was provided to the first defendant, resulting subsequently in the execution of a confidentiality agreement on 3 April 1995 ('the confidentiality agreement'). Thereafter, the second defendant resigned from the second plaintiff. On 30 November 1995, 'Stopcar' was launched. The second plaintiff 1998 3 MLJ 422 at 423 received a letter from the fourth defendant's solicitors the company which claimed to have developed the Stopcar demanding the cessation of the use of the trade mark 'Stopcard'. It was unchallenged that the second plaintiff had, prior to the launch of 'Stopcar', heavily publicised their product 'Stopcard' and had on 27 November 1995 launched the 'Stopcard' product. The plaintiffs claimed for, inter alia: (i) specific performance as against the first defendant of the confidentiality agreement; (ii) an action in passing off against all the defendants; (iii) damages on the basis of a conspiracy by all the defendants to obtain information from the plaintiffs and thereafter to utilise the information to manufacture a product identical or similar to the plaintiffs' product by using a trade mark similar to the plaintiffs' trade mark; and (iv) damages in conversion. The defendants argued, inter alia: (i) that the plaintiffs had nothing to protect by way of a patent, thus they had nothing to protect by way of an action based on breach of confidence; (ii) the information imparted prior to the execution of the confidentiality agreement was not imparted under any obligation of confidence; (iii) a mere distributor, such as the second plaintiff, may not acquire proprietary rights sufficient to sustain an action in passing off; (iv) the cause of action of conversion in respect of intellectual property rights is misconceived as it does not relate to ethereal or ephemeral matter such as information; and (v) proof of actual damage is a necessary ingredient at trial and only in the case of an interim application for a quia timet injunction would the likelihood of damage suffice. Held, allowing the plaintiffs' claims: (1) The first defendant, through its employees, had breached the confidentiality agreement not to use any part of the information provided to it in any manner whatsoever to its competitive advantage. It was also clear that the second defendant had divulged to the defendants for their use and benefit confidential information and trade secrets with regard to the plaintiffs' product. A director, such as the second defendant, is precluded from using any advantage obtained by virtue of his position as a director, especially with regard to confidential information obtained, after he resigns, more so when his resignation is seen to have been motivated by a desire to obtain for himself the advantage actually sought by the company. The second defendant was also in breach of his fiduciary duties not to obtain a business advantage over the second plaintiff and for which he had been negotiating on behalf of the second plaintiff. Thus, the plaintiffs were entitled to an order for an injunction against the second defendant together with damages as prayed for (see p 440F-G).Even in the absence of an agreement, the first and second defendants owed an equitable obligation to the second plaintiff in relation to confidential information they received in their 1998 3 MLJ 422 at 424 capacities as consultant and director of the second plaintiff respectively. The second defendant was privy to all, if not most, of the confidential information by virtue of his position as the director of the second plaintiff. The information was used by the defendants in the design, manufacture, marketing and promotion of the 'Stopcar' product. Such use by the defendants amount to a breach of confidential information (see p 440H-I). (2)

A claim to confidential information does not mean the information must pass the patent test. It is only necessary to show that the information is confidential and cannot be found in the public domain. Patents give protection only for 15 years, after which the public is free to exploit it, whereas a trade secret can remain a trade secret forever and is protected forever (see p 445D). (3) Information although imparted before the execution of the confidentiality agreement was imparted under an obligation of confidence as it was imparted during negotiations. The need for confidence must be implied and must exist throughout the period of negotiations (see p 445GH). (4) The law of passing off is essentially concerned with the protection of the goodwill associated with a business. Actual trading itself is not crucial in order to create goodwill. In this case, the second plaintiff has in fact extensively advertised its product by use of the name 'Stopcard' prior to its launch and also subsequent to its launch. By virtue of this extensive advertising campaign, the second plaintiff has generated goodwill in its name 'Stopcard' albeit in a short time, in relation to anti-car theft devices. It may be concluded that the second plaintiff owns the goodwill in Malaysia jointly with the third plaintiff (see pp 446E, G, I and 447B, C).Furthermore, the second plaintiff is not merely a conduit for the manufacturer. Among others, the second plaintiff developed the operational system of the product in Malaysia and owns the intellectual property rights with regard to this system. It was clear that the second plaintiff is the first to use the trade mark 'Stopcard' in Malaysia in respect of this changed product and thus owns the goodwill in the trade mark in Malaysia (see p 447G, I) Hai-O Enterprise Bhd v Nguang Chan; Liquor Trader (a firm, intervening) [1992] 4 CLJ 1985 distinguished.Thus, the adoption by the defendants of the trade mark 'Stopcar' in relation to a product identical to the plaintiffs was done with the intention of appropriating the second plaintiff's goodwill and to pass off the defendants' product as that of the second plaintiff's (see p 448H-I). (5) There is no need to specifically plead 'sole and/or predominant purpose' in the reamended statement of claim as it is only necessary to so plead if the plaintiffs have alleged conspiracy by acts which are lawful. If the conspiracy is based on all or any of 1998 3 MLJ 422 at 425 the unlawful acts as stated herein, namely, passing off, conversion, breach of fiduciary duties and breach of confidentiality, is not necessary to plead 'sole and/or predominant purpose'.In this case, the evidence showed that there was a conspiratorial grand design by all the defendants to usurp the goodwill and business of the plaintiffs by launching a product similar to or identical with the product of the plaintiffs to cash in on the lucrative anti-car theft alarm system. The plaintiffs had also suffered damage in the loss of its monopoly of the market. Therefore, it was held that the defendants did conspire to injure the plaintiffs (see pp 449I and 450F-G). (6) Due to the rapid and highly volatile revolution in technology and with the concept and subsequent incept of the Multi Media Super Corridor, the courts must take a broader view of the meaning of property and include information as such. Confidential information falling within intellectual property should be accepted for the purposes of giving rise to an action in conversion. The submission of the defendants that there must be deprivation of use or possession of property before an action for conversion can emerge, is unattractive. A mere dealing with property in a way inconsistent with the rights of the owner is sufficient. From the evidence, it was clear that the defendants had without authority taken possession of the plaintiffs' property with the intention of asserting a right over it (see p 451A-C). (7) The plaintiffs do not have to prove actual damages. The very likelihood of damage is sufficient. One of the ways in which the goodwill of a business or its reputation is injured is by way of

appropriation by another person of the plaintiffs' goodwill and reputation. The use by the defendants of the trade mark 'Stopcar' which is very similar to that of the plaintiffs' 'Stopcard' trade mark is an appropriation of Stopcard's goodwill. There is also a likelihood of damage to the plaintiffs' reputation if the defendants' product has any shortcomings which said shortcomings will be attributed to the plaintiffs, due to the confusion ensuing out of the similarity of the trade marks. In any event, actual damage has been shown (see p 452I and 453A-B). Obiter: (1) It is obvious that a patent can only be applied for in respect of a new product involving an inventive step. It is a requirement that in a patent document, prior art has to be disclosed in that all existing products which are similar in the market have to be disclosed. The patent must then state what is inventive about the product to set it apart from the prior art. It is significant to note that in the defendant's patent document, the 'Stopcard' product was not mentioned. The allegation that prior art is based on 1998 3 MLJ 422 at 426 patented product is rejected. Section 14 of the Patents Act 1983 defines prior art as everything disclosed to the public anywhere in the world and this means that all inventions which the party filing the patent is aware of, must be stated. Therefore, the first defendant had deliberately failed to disclose the 'Stopcard' product (see p 436C-D). (2) The effect of the 'springboard' doctrine is that it is open to the court to restrict the use of the plaintiff's information for such time as it is reasonable to expect the defendant to have used its own labour and skill to produce the same information, possibly by way of reverse engineering. In this case, since the evidence of PW1 showed that it is not possible to reverse engineer the product because the idea is in the chip, the court is constrained to hold that the principle of springboard doctrine cannot assist the defendants herein (see p 444I). 39) TN METAL INDUSTRIES SDN BHD & ORS v NG PYAK YEOW[1996] 4 MLJ 567 The petitioners filed a petition to wind up the respondent company under ss 218 and/or 143 of the Companies Act 1965 ('the Act'). Prior to the winding-up order being made, a provisional liquidator ('the provisional liquidator') of the respondent company was appointed by an order of the High Court on 6 April 1995. The provisional liquidator obtained an order for the bailiff to take possession and control of Lot 1, Lorong 10B, Telok Panglima Garang, Banting, 42500 Kuala Langat ('the Telok Panglima address') and to deliver possession of the said property to the provisional liquidator. In support of the application, the provisional liquidator affirmed that he had been informed by a representative of the respondent company that its documents, books and other effects of business were to be found at the Telok Panglima address. He then proceeded to the Telok Panglima address and met a director of the respondent company, who refused to vacate the premises and hand him the keys to the property even after being shown the sealed copy of the order of the court appointing him the provisional liquidator. Therefore, he made a police report against that director and obtained an ex parte order for a warrant of arrest from the High Court which was later successfully set aside by the respondent company. Having set aside the order, the four applicants filed this application for leave to commence proceedings in tort against the provisional liquidator and to claim special damages. The applicants alleged that (a) the proposed defendants unlawfully conspired to injure them by abuse of legal process, malicious enforcement of order and trespass; (b) there were certain crucial facts missing from the police report; (c) the provisional liquidator took directions from the petitioners; and (d) the proposed defendants wanted to paralyse the four applicants' business to apply pressure on the

directors of the respondent company to settle the unjust demands of the petitioners. The applicants' c laim was supported by an affidavit affirmed by Tay Yew Keng, the managing director of the first applicant. The provisional liquidator averred that the applicants and the respondent company were all related companies 1996 4 MLJ 567 at 568 and shared some directors and shareholders. He also questioned the propriety of the affidavit of Tay who affirmed the affidavit on behalf of all the other three individual legal entities. The provisional liquidator argued that (a) if the applicants had any bona fide complaints against him they should first take their complaint to the Official Receiver as provided for under s 229(1) of the Act; and (b) by virtue of r 63 of the Companies (Winding-Up) Rules 1972 ('the Rules') and s 14 of the Courts of Judicature Act 1964, he was an officer of the court and was therefore conferred judicial protection in the lawful discharge of his duties. Held, dismissing the application: (1) The fact that the three independent legal entities have entrusted their case into the hands of the managing director of the first applicant lent weight to the suggestion that the applicants and the respondent company shared the same directors and shareholders and that their relationships were closely intertwined and interrelated. There was no specific denial of the interrelationship between the applicants and the respondent company as alleged by the provisional liquidator. Therefore, the principle that where one party made a positive assertion upon a material issue, the failure of his opponent to contradict it was usually treated as an admission by him of the fact so asserted applied (see p 578D-G; Ng Hee Thoong & Anor v Public Bank Bhd [1995] 1 MLJ 281 followed). (2) There was no requirement that the maker of a police report had to state every allegation in his police report. Once a report stating basic facts necessary to commence an investigation was made then a statement was recorded and details would be given in that statement. Also, the provisional liquidator had to take directions from the petitioners and he had to be accompanied by the petitioners' solicitors. This did not amount to collusion or conspiracy. As opposed to such bare allegations, was the untarnished record of the provisional liquidator whose credentials and work had been laid bare and no impropriety or abuse of power or process had been shown in respect of any of the 160 companies he had so far wound up by order of the High Court of Malaya (see pp 578I, 579A-B; Chock Kek Ling v Patt Hup Transport Co Ltd & Ors [1966] 1 MLJ 120 followed). (3) On the facts as they stood on the affidavits, there was no substance in the applicants' allegations. Taking into consideration the facts of the present case, as averred by the applicants in the various affidavits, the attitudes, beliefs and objectives of the petitioners and the provisional liquidator were nothing more than to execute the due process of the law. In any event, the absence of reasonable and probable cause was not shown by the applicants. Therefore, the applicants had failed to show a case for malicious prosecution, because throughout the alleged trespass and/or act of malicious prosecution, the provisional liquidator had proceeded on the 1996 4 MLJ 567 at 569 guidance and advice of solicitors including the petitioners' solicitors (see pp 580F, H, 581C; QIW Retailers Ltd v Felview Pty Ltd & Anor (1989) 7 ACLC 510 followed). (4) Where a legal process had been perverted to satisfy some other motive such as extortion or oppression, an action would lie at the feet of a party that suffered the wrong. This was the tort of abuse of process which depended on the misuse of the process however correctly it was obtained. The abuse of process must be used mainly for a purpose outside the scope of the

legal process or an action which the court was asked to adjudicate upon. In the present case, the applicants had not satisfied the court that the facts supported a case for abuse of process against the provisional liquidator. This was because there would be no abuse involved if a plaintiff genuinely sought to achieve what he was entitled to by way of a suit and thus filed the suit for the purpose of achieving that objective (see p 583B-F, H; Grainger v Hill (1838) 4 Bing NC 212; 132 ER 769 and Goldsmith v Sperrings Ltd [1977] 2 All ER 566 followed). (5) The applicants herein were third parties affected by the conduct of the provisional liquidator and they did not fall within the ambit of s 229(1) of the Act or r 277(2) of the Rules (see p 584E). (6) To bring a case against officers of the court, leave of court should be obtained. As this was a case where the applicants intended to file proceedings in tort against a court appointed provisional liquidator, leave must be sought. This was because the mischief complained of by the applicants was done whilst the provisional liquidator was in office which meant that he was an officer of the court (see p 585I; Zainal Abidin Putih & Anor v Che Wan Development Sdn Bhd [1992] 2 MLJ 233 and Chi Liung Holdings Sdn Bhd v Ng Pyak Yeow [1995] 3 MLJ 204 followed). (7) Clearly, the present application was based on ss 218 and 143 of the Act. As the applicants had taken out a summons in chambers under the same case number dealing with the companies winding-up action and specifically raised in the intitulement that they would rely on the provisions of the sections of the Act which the applicants felt were relevant to their purpose, they were bound by their own course of action. Fair warning had been given to the provisional liquidator that the applicants would confine themselves to the Act and, therefore, they must find their remedies within the strict walls of the Act. This meant that it was wrong for the applicants to seek leave under the suit already filed which related to company matters. The claim in tort was under common law and the applicants should have applied by way of originating summons instead. Further, the application for leave to issue a writ under common law for damages ought to have been by way of originating summons too. Therefore, the application must fail (see pp 586E, 587D, I, 588A; Cheow Chew Khoon (t/a Cathay Hotel) v Abdul Johari bin Abdul Rahman [1995] 1 MLJ 457 followed). 1996 4 MLJ 567 at 570 (8) A stong prima facie case on the facts must be established before leave would be given to sue a liqudator. However, on the facts and the law relating to this case, the applicants had failed to show that there was sufficient evidence to warrant the granting of leave to file an action for the tort of conspiracy, abuse of legal process, malicious prosecution and trespass (see p 588G, H; Furber v Kratter (The Times, 21 July 1988) not followed). 40) NG AH BA & ORS v RAMANDA SDN BHD[1996] 1 MLJ 62 The first to the fourth appellants, who were also the shareholders and directors of the fifth appellant company, entered into a sale and purchase agreement ('the first agreement') to purchase a piece of land in Seberang Perai ('the land') from its beneficial owners. The first agreement contained a nomination clause which required the beneficial owners to transfer the land to any person nominated by the former. Meanwhile, the first to the fourth appellants entered into another sale and purchase agreement ('the second agreement') to sell the land for the sum of RM3,253,966.85 to the respondent. Later, pursuant to the nomination clause in the first agreement, the land was transferred in favour of the fifth appellant company. A fresh agreement ('the third agreement') was then entered into between the appellants and the

respondent, whereby the fifth appellant company undertook to execute a valid and registrable memorandum of transfer in favour of the respondent, provided that the respondent was not in breach of any of its obligations under the second agreement. Having fulfilled its obligations, the respondent later called for a transfer in its favour. However, the fifth appellant company, who had defaulted under the first agreement, was unable to do so. The respondent brought summary proceedings for specific performance of the second agreement against the appellants, pursuant to O 81 of the Rules of the High Court 1980 ('the RHC'). The trial judge held that there was no triable issue and granted a summary judgment to the respondent. The second, third and fifth appellants appealed on the grounds that the trial judge had failed to consider the evidence of a possible conspiracy between the respondent's manager, the first appellant, and the appellants' solicitors, in that the actual purchase price of the land which was RM4.8m, was concealed from them. Held, dismissing the appeal: (1) (Per Shaik Daud JCA) If a defendant in an application for summary judgment under O 81 of the RHC could show that there is a triable issue or that there ought for some other reasons 1996 1 MLJ 62 at 63 to be a trial of the action, the judge ought to dismiss the plaintiff's application and grant the defendant leave to defend (see p 69D-E). (2) (Per Shaik Daud JCA) In this case, however, the trial judge was right in rejecting the averment of conspiracy as an issue to be tried, as being unreasonable and unfounded. The second agreement clearly expressed that the purchase price of the land to be RM3,253,966.85, and this was admitted by three of the appellants in their statement of defence. The third appellant had also affirmed in his affidavit that the original purchase price of RM4.8m was reduced to RM3,253,966.85 after negotiation. In the light of the admissions, it was clear that the appellants knew all along that the purchase price was in fact reduced (see pp 69I and 70A-D). (3) (Per Shaik Daud JCA) In fraud cases, it is clear that the party making allegations of fraud is required to condescend to particular, and that a mere general allegation of fraud is not sufficient. This principle applies equally to cases involving allegations of conspiracy. The appellants in this case had merely made sweeping and general allegations of conspiracy without alluding to any particulars. Thus, what the appellants succeeded in raising, at best, was a mere suspicion, which was certainly not sufficient (see pp 70I and 71A-E) Cannock Chase District Council v Kelly [1978] 1 All ER 152; [1978] 1 WLR 1 and See Hua Daily News Bhd v Tan Thein Chin & Ors [1986] 2 MLJ 107 followed. (4) (Per Gopal Sri Ram JCA) Viewed against the background of the events that transpired prior to the execution of the second agreement, the documents relied upon by the appellants did not lend any assurance whatsoever to the charge of conspiracy made by them (see p 77F). (5) (Per Gopal Sri Ram JCA) The rule relating to the pleading has to be observed strictly, even in cases coming within the summary procedure. In this case, neither the defence nor the affidavit of the appellants contained any particulars of the alleged fraud or conspiracy. Though it was of no consequence that the defence did not condescend to particulars, as this was an application under the summary jurisdiction, and thus there was no obligation on the part of the appellants to deliver a defence, the affidavit, however, must do so (see p 77H) Cannock Chase District Council v Kelly [1978] 1 All ER 152; [1978] 1 WLR 1 and See Hua Daily News Bhd v Tan Thien Chin [1986] 2 MLJ 107 followed. 1996 1 MLJ 62 at 64 (6)

(Per Gopal Sri Ram JCA) There was a clear admission in the appellant's defence that the price asked for was RM4.8m and that it had been negotiated down to RM3,253,966.85. It was clear that one could not have a conspiracy in the face of that admission. The contradiction between some parts of the appellants' defence and affidavit also demonstrated the lack of bona fides on the part of the appellants when they alleged that there was a conspiracy (see p 78C-D). (7) (Per Gopal Sri Ram JCA) On the totality of all the evidence, it could be concluded that the allegation of a conspiracy to defraud was frivolous and made without any basis. It must be remembered that taking a plea of fraud is a serious matter and that no such plea ought to be put on the record in the absence of sufficient material in support. The judge was entirely correct in his decision that there was no triable issue nor any other reason for a trial (see pp 78E-F). 41) TUAN HAJI ISHAK BIN ISMAIL & ORS v LEONG HUP HOLDINGS BHD AND OTHER APPEALS[1996] 1 MLJ 661 On 12 March 1993, the petitioner company in the court below, Leong Hup Holdings Bhd ('Leong Hup') entered into an agreement ('the management agreement') with KFC Holdings (Malaysia) Bhd ('KFCM'). Leong Hup was represented by Kevin and Francis Lau ('the Lau brothers') and KFCM, by the first respondent to the petition('Ishak') and the second respondent to the petition ('George Ting'). Pursuant to the management agreement, Leong Hup was to manage KFCM's upstream operations, whilst Leong Hup appointed KFCM to assist it in the management of Leong Hup's retail outlets. It was also provided that the Lau brothers were to be appointed to the board of directors of KFCM. This was done on 28 June 1993. However, there was no provision that the Lau brothers were entitled to permanent representation on the board of KFCM. By 1 Mac 1993, Leong Hup had acquired 20.29% of KFCM shares. On 19 August 1993, KFCM and KFC International concluded a franchise 1996 1 MLJ 661 at 662 agreement ('the franchise agreement'), whereby it was a condition precedent to KFC International's collaboration with KFCM that George Ting should control and manage the affairs of KFCM. However, the KFCM board was later reshuffled, and this effectively precluded George Ting from making any financial commitments without the approval of the Lau brothers. On 27 July 1994, KFC International alleged that KFCM was in breach of the franchise agreement, and presented an ultimatum that the agreement be terminated unless, inter alia, that the Lau brothers were evicted from KFCM. On 27 December 1994, the sixth and seventh respondents requisitioned the extraordinary general meeting ('EGM') of the company to remove the Lau brothers as directors of the company. Leong Hup presented a petition to the High Court for relief under s 181 of the Companies Act 1965 ('the Act'), contending that by virtue of certain representations and oral agreements made by the first three respondents to the petition, Leong Hup had a legimate expectation to continue to be represented on the board of KFCM without any interference from any of the respondents. It was also argued that contrary to the alleged agreements and representations, certain respondants to the petition had acted in cahoots, collusion or by way of a conspiracyto requisition the EGM to remove Leong Hup's representatives from the KFCM board. The respondents to the petition applied to the High Court pursuant to O 18 r 19(1) of the Rules of the High Court 1980 ('the RHC') for an order to strike out the petition on the ground that it disclosed no reasonable cause of action. They contended that the alleged agreements and representations were irrelevant because a group of shareholders, whether acting for themselves or purportedly on behalf of the company, could not contract out of the provisions of s 128 of the Act which conferred a right on all its shareholders to remove directors of the company at a general meeting. They further contended that the facts

pleaded could not provide the basis for any legitimate expectation as alleged. The trial judge dismissed the application, making certain observations at the close of submissions and later giving a considered written judgment. At the close of submissions, the trial judge had taken the view that O 18 r 19(1)(a) of the RHC 1980 was reserved for cases that were 'plainly and obviously hopeless'. The respondents to the petition appealed to the Court of Appeal. Held,allowing the appeal: (1) A 'cause of action' is the entire set of facts that gives rise to an enforceable claim; the phrase comprises every fact which, if traversed, the plaintiff must prove in order to obtain judgment (see p*). (2) What may be 'plain and obvious' to a specialist in company law may not be so to another who does not have this specialized 1996 1 MLJ 661 at 663 knowledge. The standard is an objective one and implies that the perception required is that of a person who has the required expertise. The court may strike out a claim even though it required a long and elaborate hearing before the court was satisfied that there was no cause of action (see p679D-F); McKay v Essex Area Health Authority [1982] 2 All ER 771; Re Saul D Harrison & Sons (1994) BCC 162; and Re Ringtower Holdings plc (1988) 5 BCC 82 followed. (3) The cause of action that Leong Hup claimed lacked defination. It was unclear whether the alleged entitlement to board representation was binding on KFCM as a company, and/or all the shareholders of KFCM, and/or the fourth to the seventh respondents, and/or all the shareholders of these companies (see p 692D). (4) In the absence of either a fundamental understanding or an express agreement to that effect embodied in the company's article or otherwise, a claim to a legimate expectation to participationjin the management of a public company by way of a permanent seat on the board of directors would not suceed. It followed that Leong Hun had no legitimate expectation which was enforceable against the respondents to the petition (see p*); Ebrahimi v Westbourne Galleries Ltd [1972] 2 All ER 492; Re Saul D Harrison & Sons plc (1994) BCC 477; Re Ringtower Holdings plc (1988) 5 BCC 82; Re Blue Arrow plc [1987] BCLC 585; and Re Tottenham Hotspur plc [1994] 1 BCLC 695 followed. (5) There was neither oppression of Leong Hup nor disregard of its interests as a member in connection with the affairs of KFCM or the powers of the directors of KFCM, as claimed by Leong Hup under s 181 of the Act (see pp 687D-I and 694H). (6) The power to vote in general meeting is not a fiduciary power, and a shareholder owes no duty to anybody as to how he exercises his vote (see p696I); Northern Counties Securities Ltd v Jackson & Steeple Ltd [1974] 2 All ER 625 followed. (7) By virtue of s 128(1) of the Act, a simple majority of the shareholders of a company may vote to remove a director and no agreement made by the directors or the company can fetter that right. The courts will not interfere with the statutory right of shareholders to remove directors (see p698D); Bentley-Stevens v Jones & Ors [1974] 2 All ER 653; Solaiappan v Lim Yoke Fan & Ors [1968] 2 MLJ 21; and Dato' H M Shah & Ors v Dato' Abdullah bin Ahmad [1991] 1 MLJ 91 followed. (8) Section 128(1) of the Act overrides the provisions of s 181 of the Act (see p698I). 1996 1 MLJ 661 at 664

(9) Since there was nothing in the petition from which it could be safely inferred that there was any agreement binding the shareholders of KFCM from casting their votes as they thought fit, and there was nothing unlawful about voting directors off the board in a general meeting, the petitioner company's complaint about 'cahoots' or collusion or conspiracy also failed (see p699H); Crofter Hand Woven Harris Tweed Co Ltd v Veitch [1942] 1 All ER 142 followed. 42) PT INTERNATIONAL NICKEL INDONESIA v GENERAL TRADING CORPN (M) SDN BHD[1978] 1 MLJ 1 The respondents had claimed the sum of M$373,586.52 being the price of timber sold and delivered to the respondents. The appellants alleged that the purchase price for the timber was inflated because of the conspiracy, fraud and corruption of agents acting on their behalf and allegedly on behalf of the respondents. The Registrar gave leave to the respondents to sign final judgment for the sum claimed and costs and an appeal to the High Court was dismissed. The appellants appealed to the Court of Appeal. Held, allowing the appeal: (1) if the allegations of the appellants could be established they have a good defence to the action and a good counterclaim and set-off which exceeded the respondents' claim; (2) it was plain on the affidavits that there were triable issues and therefore leave to defend should have been given. 43) MERCANTILE BANK LTD, IPOH v YOON SIEW KANG[1969] 1 MLJ 174 This was an appeal against the decision of MacIntyre J. ( [1967] 2 MLJ 226). The appellants, who had granted overdraft facilities to a firm of stockbrokers, had among securities held by them, cheques drawn in favour of the firm by others, including six cheques drawn by the respondent. Subsequently these six cheques were negotiated to the appellants. When the cheques were dishonoured upon presentation, the appellants sued the respondent on the amount of the cheques. The learned trial judge dismissed the action on the ground that the appellants had not taken the cheques in good faith as they had notice of a defect in the title of the firm of stockbrokers and therefore their claim as holders in due course must fail. He held that the respondent had issued the cheques to help the firm to conceal from the appellants the true financial position of the firm, and that the cheques were issued without consideration; as the firm of stockbrokers could not have sued the respondent on them, the appellants who purchased the cheques from the firm, with notice of the defect, were not to be placed in a better position than the firm. On the question of notice, he held that if the appellants had probed into the matter they would have discovered that the cheques had been given to the firm for no consideration at all and if they had scrutinized the cheques, they would have found them apparently worthless as negotiable instruments because their dates had been altered. Held, allowing the appeal: (1) the cheques were complete and regular on their face and although the dates on them had been altered, these as the learned trial judge found could only have been done by the respondent and the directors of the firm in pursuance of a conspiracy and therefore the respondent could not rely on them to avoid the cheques; (2)

on the facts the appellants took the cheques in good faith and for value, and had no notice of any defect in the title of the firm who negotiated them; (3) the appellants were therefore entitled as holder.