Sunday, 7 September 2014

Malaysia-Non-parties

In the Court of Appeal case of China Road & Bridge Corp & Anor v DCX Technologies Sdn Bhd and another appeal [2014] 5 MLJ 1, it was held that:-

"...[29] We have read the voluminous appeal records and the lengthy submissions of the parties. We are grateful to the learned counsel for the comprehensive submissions with a note that for a simple issue of breach of memorandum and that too on a specific issue of 'confidential information' it does not warrant at public expense to engage judicial time more than necessary. After much consideration to the learned counsel for the plaintiff we are of the considered view both the appeals must be allowed. Our reasons, inter alia, are as follows:


  • (a)
    We are of the considered view that the learned trial judge, based on pleadings as well as burden of proof, taking into consideration the fairness rule for any adjudicating process, should have dismissed the plaintiffs claim in limine or should have only dealt with the issue of breach of contract against the first defendant (see Pertamina v Kartika Ratna Tahir & Ors [1983] 1 MLJ 136; [1982-1983] 1 SLR 351). Our reasons, inter alia, are as follows: 
  • (i)
    In the instant case, four defendants were sued and the third and fourth defendants were not served with the writ and the pleadings were not amended to reflect the action between the first and second defendants only. In consequence, the pleadings will be caught by the prolixity rule and ought to have been directed by the learned judge to be amended and/or struck out in limine. (see Davy v Garret (1877) 7 Ch D 473; Watson v Rodell 3 Ch D 380; Cashin v Cradock 3 Ch D 376; Lee Ah Lin v Lee Choon Ket & Ors [2009] MLJU 283; [2012] 2 CLJ 458); 
  • (ii)
    In addition, it should be dismissed under the rule that the plaintiff should not be allowed to prove its case against non-parties. That too when the pleadings say 'nasty' things against the third and fourth defendants to demean their integrity. (see paras 15 and 16 on issues to be tried). And that too by naming them and not serving on them will in actual fact be abhorrent to notion of justice and fair play. It is the duty of the court to ensure the trial process is not abused whether there was objection or no objection by the party concerned. The trial court should not have lent its stage at all based on fairness rule advocated in the Federal Court case of Metramac Corporation Sdn Bhd v Fawziah Holding Sdn Bhd [2007] 5 MLJ 501; [2007] 4 CLJ 725 where Richard Malanjum CJSS observed:

    [92] Obviously it was a case of striking at those persons who had no opportunity to defend themselves under a cover of judicial performance. A reminder is thus apposite that it 'can cause great unfairness to third parties if judges make findings of fact or comments which pay no regard to this matter. As a general rule, it is inappropriate, and often unfair, for a judge, in reasons for judgment, to make an unqualified adverse finding concerning someone who is not a party to litigation and who has had no opportunity to answer the allegation in question ... Non-parties can often be seriously damaged by a judge's manner of expressing reasons for judgment. Sometimes this may be the result of mere thoughtlessness. A judge should never cause unnecessary hurt.' (See Aspects of Judicial Performance by Murray Gleeson AC, Chief Justice of Australia).

  • (iii)
    there are also a number of Indian cases which has also anchored on the 'fairness rule'. In Om Prakash Chautala v Kanwar Bhan & Ors [2014] Indlaw SC 62 though it was related to judicial review proceedings the court made the following observations:

    8 In State of Bihar and another v PP Sharma, IAS and another[1], this Court has laid down that the person against whom mala fides or bias is imputed should be impleaded as a party respondent to the proceeding and be given an opportunity to meet the allegations. In his absence no enquiry into the allegations should be made, for such an enquiry would tantamount to violative of the principles of natural justice as it amounts to condemning a person without affording an opportunity of hearing. (Emphasis added.)..."

Malaysia-Standard of proof of fraud in civil cases

In Edwin Anak Omang & Anor v Jemin Anak Longun [2013] MLJU 1365, it was held that:-

"...But it is our law that the standard of proof for fraud in a civil case where there is a criminal element involved, such as cheating in this case, is beyond reasonable doubt (see the Federal Court case of Ang Hiok Seng v Yim Yut Kiu [1997] 2 MLJ 45)..."

Malaysia-Failure to obtain leave to initiate action against a wound-up company

In the Court of Appeal case of Mesuntung Property Sdn Bhd v Kimlin Housing Development Sdn Bhd [2014] 4 MLJ 886, it was held that:-

"...[24] From the above authorities, the appellant has the burden of satisfying the court of two criteria:

  • (a)
    the appellant's claim cannot be adequately dealt with by the winding up court; and 
  • (b)
    the appellant has a prima facie case against the respondent. ..."

Malaysia-Statutory duties owed by a director of a company

In Petra Perdana Berhad v Tengku Dato' Ibrahim Petra Bin Tengku Indra Petra & Ors [2014] MLJU 267, it was held that:-

"...[211] Sections 132(1) and 132(1A) of the Companies Act 1965 set out the statutory duties owed by a director to a company. Section 132(1) provides:-

"...A director of a company shall at all times exercise his powers for a proper purpose and in good faith in the best interest of the company";
Section 132(1 A) provides:-
"A director of a company shall exercise reasonable care, skill and diligence with:-

  • (a)
    The knowledge, skill and experience which may reasonably be expected of a director having the same responsibilities; and 
  • (b)
    Any additional knowledge, skill and experience which the director in fact has". 
These sections came into force vide Amendment Act A1299/07 on 15 August 2007, having replaced the previous section 132(1) which reads "
A director shall at all times act honestly and use reasonable diligence in the discharge of the duties of his office."

[212] In Pioneer Haven Sdn. Bhd. v Ho Hup Construction Co Bhd. & Anor and other appeals [2012] 3 MLJ 616 at 654 the Court of Appeal held that section 132(1) and 132(1A) do not alter the law in this area but enhance the common law duty of care and equitable fiduciary duties. At paragraph 233, page 654 this is what the Court said:-

"...The prior provision ofs 132(1) requires a director to act honestly. The current s 132(1) of the Act, requires a director to act in good faith in the best interests of the company. It is accepted that for all intents and purposes, the scope of the directors' duties to act honestly under the old s.132(1) and the new s. 132(1) are the same. Thus the old case law relating to the duty to act honestly continues to be relevant (see Cheam Tat Pang v Public Prosecutor [1996] 1 SLR 541).It is also recognised that the duty to act in the best interests of the company means different things, depending on the factual circumstances "

[213] And the test to be adopted in determining whether there was a breach of such statutory duty was defined as follows at paragraph 238 at page 655:-

"[238]... The test is nicely condensed in Ford's Principles of Corporations Law (para 8.060), that there will be a breach of duty if the act or decision is shown to be one which no reasonable board could consider to be within the interest of the company.
[239]This test is adopted in Charterbridge Corpn Ltd v Lloyds Bank Ltd.[1970] Ch 62 at p 74, in that, to challenge a decision of the directors the test is whether:-
...an intelligent and honest man in the position of the director of the company concerned, could in the whole of the existing circumstances have reasonably believed that the transactions were for the benefit of the company."
[240]The above principle is often referred to as the 'Charterbridge Principle'.
...
[242] It is important to note, following high authority, such as Howard Smith Ltd v Ampol Petroleum Ltd [1974] AC 821, that the court does not substitute its own decision with that of the directors, since the decision of the directors to enter into the J DA is a management decision."

[214] This encapsulates the core of the duties owed by director under statute...."

Malaysia-Alibi

In Public Prosecutor v Manimaran a/l Amas & Ors [2014] 10 MLJ 761, it was held that:-

"...[119] I find that the common defence put forward by all the three accused persons was that they were not present at the scene of crime on the day and time in question. They said they were elsewhere.
[120] In the first place, I find that such a defence cannot be considered as an alibi defence under s 402A of the Criminal Procedure Code, as they failed to give a ten days notice as required by the relevant provision...."

Malaysia-Duty of a court at the end of the prosecution's case

In Public Prosecutor v Mohd Abdul Aziz bin Ibrahim [2014] 10 MLJ 824, it was held that:-

"...[65] Thus, at the close of the prosecution case, after considering the totality of the evidence adduced, the court has to ask itself this question: If I call on the accused to enter upon his defence and he elects to remain silent, am I prepared to convict him on the totality of the evidence adduced by the prosecution?..."

Malaysia-Declaratory orders

In Seah Pei Yee v Hap Seng Star Sdn Bhd [2014] 10 MLJ 881, it was held that:-

"...[10] By way of a preliminary point, I am of the view that in seeking a relief which, inter alia, includes a declaratory order, the plaintiff is at liberty to decide whether to commence this action by an originating summons or by a writ of summons. I do not agree with the submission of counsel for the defendant that by commencing this writ action, the plaintiff has conceded that this is a matter which must be tried through viva voce evidence.
[11] The court has the power to grant the plaintiffs application for summary judgment in a plain and obvious case where the defendant has no defence to the plaintiffs claim (see Bank Negara Malaysia v Mohd Ismail & Ors [1992] 1 MLJ 400, Chen Heng Ping & Ors v Intradagang Merchant Bankers (M) Bhd [1995] 2 MLJ 363, United Malayan Banking Corporation Berhad v Palm & Vegetable Oils (M) Sdn Bhd [1983] 1 MLJ 206; [1982] CLJ 547 and United Merchant Finance Bhd v Majlis Agama Islam Negeri Johor [1999] 1 MLJ 657; [1999] 2 CLJ 151)....[21] It is clear that the defence is not sustainable and there are no triable issues raised. Since this is a plain and obvious case, I decided that in the interest of justice, summary judgment ought to be given to the plaintiff without the necessity of a full trial for viva voce evidence..."

Malaysia-A substantive relief cannot be claimed under the other reliefs prayer

In Perisai Wira Sdn Bhd v Harum Minat Sdn Bhd & Ors [2014] 10 MLJ 809, it was held that:-


"...[34] I further agree with the defendants that the court cannot entertain this relief certainly not under its omnibus clause of 'such further or other relief as the court deems just and proper'. A substantive relief in the nature of damages cannot be said to fall within such parameters...."

Malaysia-Failure to obtain leave under Section 223 of the Companies Act, 1965

In the Court of Appeal case of Hiap-Taih Welding & Construction Sdn Bhd & Anor v Boustead Pelita Tinjar Sdn Bhd (formerly known as Loagan Bunut Plantations Sdn Bhd) [2014] MLJU 316, it was held that:-

"...[3] When this appeal came up before us, it was brought to our attention that during the 1st case management on 29.11.2012, and in the 4 subsequent case managements, the 1st defendant was directed and reminded to obtain leave or sanction in order to proceed with this appeal from the official receiver or the court under section 233(2) of the Companies Act 1965. To-date, the 1st defendant has failed to obtain leave or sanction from the official receiver or the court. Applying the principle of law as laid down in the recent Court of Appeal case of Hup Lee Coachbuilders Holdings Sdn Bhd v Cycle & Carriage Bintang Bhd [2013] 1 MLJ 406 and as the 1st defendant has failed to obtain the said sanction or leave, we had accordingly struck out the 1st defendant's appeal...."

Malaysia-Maps by government presumed to be accurate

In Tr Aling Anak Anggau & Ors v Government Of Sarawak & Ors [2014] MLJU 481, it was held that:-

"...S.83(1) of the Evidence Act provides that the court shall presume that maps or plans purporting to be made by the authority of the Government of Malaysia or the Government of any State were so made and are accurate..."

Malaysia-Restraining orders

In Bina Goodyear Bhd v Ambank (M) Bhd & Anor [2014] 10 MLJ 603, it was held that:-

"...[19] Fifth this court is also of the finding that there is no undue delay in proposing the PSA and this court accepts the necessities and reasons for time taken in presenting the same to Bursa. There is a need for time as the PSA is quite comprehensive detailing the scheme for acceptance by the authorities concerned.
[20] Further this court also is of the finding although previous application for previous ROs may have been correctly refused, there is sufficient reasons for the RO now to be applied. Past considerations refusing the same must be tempered with the current position that should acknowledge the availability of the PSA now. In this regard the PSA should be given the chance to see that it be successfully implemented and therefore there should be an order to restrain proceedings in any action against the applicant.
[21] Last but not least, this court also accepts that the director named now in order to satisfied the requirement of s 176(10A)(d) of the Act should be approved as there is no reasons that could be advanced to challenge the named director. Indeed no party had attempted to challenge or question the same.
[22] In deciding to allow the application of the applicant now, this court has taken into account some case law on the operation of s 176 of the Act and the considerations that had been applied on similar applications as decided in the case law.
[23] The first case is the case of Re Kuala Lumpur Industries Bhd & Ors [1990] 2 MLJ 180; [1991] 3 CLJ (Rep) 86 where it states:

For there to be a proposal within the meaning of s 176, it is not necessary that there should be a scheme in a complete form capable of being presented to the creditors for being voted on   Where there is such a proposal, and even before it is put to anybody, the company or any member or creditor of the company may move the court for a restraining order pursuant to s 176(10). The policy of the section is not such that a s 176(10) application has to be tagged on to a s 176(1) application. The two may be brought independent of the other.

[24] Also relevant is the case of Lityan Holdings Berhad and Others [2007] MLJU 66; [2007] 3 CLJ 554 where it is held:

A restraining order could not be made under s 176(10) of the Companies Act 1965 based merely on facts stated in the supporting affidavit of the plaintiffs. The granting of a restraining order is a serious matter that involves the interest of shareholders and creditors of the company. Firstly, before a restraining order can be granted under s 176(10) there must be in place a proposed  compromise or arrangement between the plaintiff and its creditors, or any class of them or between the company and its members or any class of them . Secondly, the company must be able to present a viable proposal for the consideration of the court supported by views of experts.

[25] In Jin Lin Wood Industries Sdn Bhd & Ors v Mulpha International Bhd [2005] MLJU 326; [2005] 7 CLJ 208 where at held [2] and [3] it states:

The restraining order needed to be extended so that the scheme would not be defeated by the filing of legal suits. If legal suits were to get in the way, all the effort, preliminary discussions and liaising with the relevant authorities to fulfil all the legal requirements would come to naught. As far as the authorities were concerned, the Securities Commission had asked for and had obtained information regarding the restructuring. The Ministry of International Trade and Industry (MITI) had said that in principle, they had no objections to the scheme.
The mere exclusion of a certain creditor does not open the applicants to imputations of mala fides and abuse of process. Under s 176(1), the applicants have the discretion not to compromise with all creditors and the rights of the remaining creditors are merely stayed. Further, there was no reason to worry about being left out in the cold as there were sufficient safeguards under the provisions of the Companies Act 1965, for instance ss 176(10B), (10C), (10D), (10F) and (10G) that provide stringent penalties for violators.

[26] Taking note of what are decided by these cases, this court is of the considered opinion that it would only be wise and fair to all parties concerned including the creditors, based on the facts of the present case to allow the application of the RO at least for one final time. This would allow an opportunity for the scheme to at least be rightly considered for its implementation. An RO denied now would only mean the applicant would be further put in a position of difficulty in trying to address the interest of all parties in its present challenging financial position. In this regard it would not benefit anyone if the RO is not granted...."

Malaysia-Amendments to articles of association

In Expo Holdings Sdn Bhd & Ors v Toyo Ink Group Bhd [2014] 10 MLJ 674, it was held that:-

"...[47] The underpinning principle on amendments is that a company may always alter or amend any of its articles. As observed by Latham CJ of the High Court of Australia in Peters' American Delicacy Company Ltd v Heath & Others (1938-1939) 61 CLR 457 at p 479:

A company cannot deprive itself of this statutory power either by agreement or by a provision contained in the articles [#8918] It is not possible, by articles of association, to make an unalterable article.

[48] Such amendment to the company's articles is however subject to the Act and to the conditions in the memorandum. This is provided under s 31 of the Companies Act 1965 which provides:

  • (a)
    subject to this Act and to any conditions in its memorandum, a company may by special resolution alter or add to its articles; and 
  • (b)
    any alteration or addition so made in the articles shall subject to this Act, on and from the date of special resolution or such later date as is specified in the resolution, be as valid as if originally contained therein and be subject in like manner to alteration by special resolution. 
[49] The plaintiffs have cited two textbooks in further support of their case. The plaintiffs submitted that in both Arjunan: Company Law in Malaysia (Lexis Nexis, 2006) and Chan & Koh: Malaysian Company Law Principles & Practice Sweet & Maxwell, (2nd Ed), the authors considered similar cases when expressing the view that the articles cannot be altered in a manner which infringes on the rights of minorities. In Chan & Koh on Malaysian Company Law Principles & Practice, the authors opined that 'the fundamental issue whether the exercising of a power by majority shareholders to alter the articles to expropriate compulsorily the shares of the minority shareholders will be valid' had been considered in at least three English cases. The authors went on to discuss those cases, namely Brown v British Abrasive Wheel Co Ltd [1919] 1 Ch 290; Sidebottom v Kershaw Leese & Co Ltd [1920] 1 Ch 154; and Dafen Tinplate Co Ltd v Llanelly Steel Co (1907) Ltd [1920] 2 Ch 124.
[50] Having examined those cases, I must express a note of caution. A distinction actually has to be drawn between the facts and circumstances in the present case from all cases discussed by the authors of Malaysian Company Law Principles & Practice. In the three English cases discussed, the courts there were concerned with the exercise of power by majority shareholders to alter the articles of association so as to expropriate compulsorily the shares of the minority. That is entirely different from the present case. Here, we are not dealing with any expropriation or anything of that nature. This is an exercise to raise capital for the defendant in order to meet the funding requirements of the defendant and, to settle outstanding banking facilities. Such objectives surely can only work in the best interest of the defendant, which is paramount; and indirectly the plaintiffs as shareholders of the defendant.
[51] As for the facts in Pang Ten Fatt & Anor v Tawau Transport Co Sdn Bhd & Ors [1986] 1 MLJ 179, they were peculiar. There, the amendment was to alter the rights and privileges of founding members and permanent directors. It was in that context that the court ruled that such amendments were null and void. Again, that is quite a different exercise from the instant case.
[52] The other decision discussed by both authors was the decision of the High Court of Singapore in Tong Kok Chai v Ocean Front Pte Ltd & Anor [1988] 3 MLJ 125. According to the authors, this case is authority for the proposition that amendments to the company's articles and memorandum must be done in good faith and in the interests of the company as a whole.
[53] With respect, a careful reading of this decision will show that this was not the ratio decidendi in the case. There, the plaintiff was seeking an interlocutory injunction restraining the first defendant from altering one of the articles of association until the hearing or until further order. The plaintiff was a shareholder of the first defendant and he had deposited his shares with Ka Wah Bank Ltd, the second defendant as security for banking facilities that he was seeking from the bank.
[54] The bank commenced legal proceedings against the plaintiff to recover monies due under the facilities granted to the plaintiff. The plaintiff denied that any monies was due and alleged that the bank in any case had violated the Banking Act of Singapore in that it had conducted banking business in Singapore without a banking licence in which case the overdraft granted to the plaintiff was illegal, null and irrevocable. The plaintiff counterclaimed for the return of his shares.
[55] In separate proceedings initiated by the bank against the first defendant, the bank sought for an order that the register of the company be rectified so as to strike out the name of the plaintiff as owner of the shares that it had pledged with the bank; and in lieu thereof, to insert the bank's name as holder of the shares. The plaintiff was enjoined in those proceedings. Pending the disposal of the case, the bank sold the shares to 'a majority shareholder of the company'. The plaintiff was notified of the sale and he disputed the bank's right to sell his shares.
[56] Subsequently, the first defendant issued a notice of an EGM to be convened for the purpose of passing, inter alia, a special resolution to alter the articles of association. Those alterations included a deletion of the existing article 26 which would restrict the transfer of shares and confer on the members a right to pre-empt in the event of a transfer of shares to a person who is not a member of the company; and the substitution of new articles which in effect gave a member a right to transfer all or any of his shares to any person, except an infant, bankrupt or person of unsound mind. No explanation was offered by the company as to why the alterations were made and why it had to be made at that stage.
[57] It was in that context that Thean J observed that the question of whether the proposed alteration of article 26 of the articles of association was bona fide for the benefit of the company as a whole was a serious question to be tried.
[58] Be that as it may, I would think that the bona fides of an act, especially one which seeks to alter the substratum of any arrangement, including a right, would require that it be done in good faith and in the best interests of the company. I would add that while the articles of a company cannot be altered such as to infringe on minority rights, the competing interests of the majority and the company as a whole must always be considered. Support for this can be found in Peters' American Delicacy where the High Court of Australia citing Allen v Gold Reefs of West Africa Ltd [1900] 1 Ch 656 said at p 480:

The power to alter articles must be exercise bona fide. It is generally said that the power must be exercised bona fide for the benefit of the company as a whole, and all recent authorities refer to the statement by Lindley MR in Allen's Case: 'The power thus conferred on companies to alter the regulations contained in their articles is limited only by the provisions contained in the statute and the conditions contained in the company's memorandum of association. Wide, however, as the language of s 50' [#8918] 'is, the power conferred by it must, like all other powers, be exercised subject to those general principles of law and equity which are applicable to all powers conferred on majorities and enabling them to bind minorities. It must be exercised, not only in the manner required by law, but also bona fide for the benefit of the company as a whole, and it must not be exceeded. These conditions are always implied, and are seldom, if ever, expressed.'

[59] The court went on to cite Allen's case where an article had been amended in such a way as to prejudice quite seriously a single person who was the only holder of fully paid up shares of the company. Despite that, the alteration was upheld as valid as it was bona fide made in order to enable the company to recover monies due to the company which surely must be for the benefit of the company.
[60] The burden of proof will lie with the plaintiffs. This was also expressed in Peters' American Delicacy, p 482 where Latham CJ wrote that:

When the validity of a resolution of shareholders is challenged, the onus of showing that the power has not been properly exercised is on the party complaining. The court will not presume fraud or oppression of other abuse of power [#8918] It cannot be the law that a resolution of shareholders is to be presumed to be invalid until the defendants in an action positively establish that it is valid.

[61] Having regard to my findings on the whole rationale behind the corporate exercise and given that there is no suggestion at all by the plaintiffs that the exercise is in bad faith, I cannot see how the articles cannot be amended as proposed. The exercise is in the view of the board in the best interests of the defendant. That view may be said to have been implicitly supported by Bursa when it approved the proposal before it was circulated to the shareholders. Most important and this fact should not be overlooked, the resolutions have been passed, approved and adopted by the majority of the shareholders at the EGM. The views and decisions of that majority must not be ignored and should never be allowed to be overtaken by the views of the minorities who have no real basis to challenge.
[62] In fact, in Peters' American Delicacy, p 480, Latham CJ had further opined that:

[#8918] The fact that an alteration prejudices or diminishes some of the rights of the shareholders is not in itself a ground for attacking the validity of an alteration [#8918] Any other view would, in effect, make unalterable and permanent any articles of association which conferred rights upon a class of shareholders, or possibly upon any shareholder, if they or he desired that those rights should continue to exist unchanged. It is plainly not the law that the fact that an alteration of articles alters the rights or prejudices the rights of some shareholders is sufficient to prevent the alteration from being validly made.

[63] Therefore, the amendment of article 130 is proper and in accord with the governing principles...."

Malaysia-Whether a stay of execution application must first be filed at the high court

In the Court of Appeal case of Tamabina Sdn Bhd & Anor v Nakamichi Corp Bhd - [2014] 4 MLJ 613, it was held that:-

"...[16] In our judgment it is crystal clear in the present case that the application is in the nature of a stay of execution. Mr Gideon Tan does not appear to dispute this fact. And this being the case, the application then ought to have been made pursuant to s 73 of the Act, read with s 43 of the same Act. The application should not have been made pursuant to s 44 of the Act. To having made the application purportedly pursuant to s 44 of the Act is an abuse of that section.
[17] When an application for an interim relief can appropriately be made pursuant to s 44 of the Act (instead of s 44) has been clearly explained by the Court of Appeal in Silver Concept's case, and we do not propose to repeat them here.
[18] Mr Gideon Tan further submits in the alternative that even if this court is of the view that there should have been a prior application made to the High Court, as required by s 73 read with s 43 of the Act, this court should not dismiss the motion, but to adjourn the application until s 43 is complied with. Learned counsel referred to that part of the judgment in Silver Concept's case where Gopal Sri Ram JCA (as he then was), in delivering the judgment of the Court, states (at p 119):

If, this court is moved for a stay without an application having been made to the High Court in the first instance, this court should normally adjourn such application until section 43 is complied with. In our view, this is plain upon a joint reading of ss 73 and 43. It is a view that derives some support from the judgment of Buhagiar J in Annamalai Chettiar v Yeoh Kee Tin [1956] MLJ 49. That was a case in which Buhagiar J sitting as a single judge of the former Court of Appeal dismissed an application for stay on the ground that the High Court had not been moved first. This is a course we would not approve as it increases costs and inconveniences the court and parties. An adjournment of the motion for stay until after the High Court has been moved is, in our view, the proper order to make.

[19] With respect, we are unable to agree with this remark which is an orbiter dicta. Section 73 of the Courts of Judicature Act merely states:

Appeal not to operate as a stay of execution
73 An appeal shall not operate as a stay of execution or of proceedings under the decision appealed from unless the court below or the Court of Appeal so orders and no intermediate act or proceeding shall be invalidated except so far as the Court of Appeal may direct.

[20] Reading s 43 with s 73, we fail to see anywhere in these sections implying that we should not dismiss the application (for not complying with s 43) but must grant an adjournment to enable the defaulting the applicants/appellants to comply with s 43 by going to the High Court to make the stay application...."

Malaysia-Whether CCTV recording is a document

In Pendakwa Raya v Mohd Abdul Aziz bin Ibrahim [2013] MLJU 530, it was held that:-

"[47] The word "document" is defined in section 3 of the Evidence Act 1950 as follows:

"document" means any matter expressed, described, or howsoever represented, upon any substance, material, thing or article, including any matter embodied in a disc, tape, film, sound track or other device whatsoever, by means of -

  • (a)
    ......; 
  • (b)
    any visual recording (whether of still or moving images); 
  • (c)
    ......; 
  • (d)
    ......; 

or by more than one of the means mentioned in paragraphs (a), (b), (c) and (d), intended to be used or which may be used for the purpose of expressing, describing, or however representing, that matter.

As such, the CCTV recording that was downloaded by PW 4 into P8 (CD) via his computer is a disc which falls within the definition of "document" in section 3...."

Malaysia-Contract

In the Court of Appeal case of Hong Leong Bank Bhd v Tan Siew Nam & Anor [2014] 5 MLJ 34, it was held that:-

"[52] Now, when the respondents gave their consent to the developer to charge the master title to Public Bank Berhad, the risk that the said bank may foreclose the land and their property was a risk which the respondents shouldered, and to borrow the words of Buckley LJ in the John Walker's case, 'any loss that may result from the maturing of that risk is a loss which must lie where it falls'. And the fact that the respondents expressly consented to the developer charging the master title to the said bank meant that the respondents were willing to shoulder the risk of foreclosure on the master title in the event that the developer defaulted in paying the loan and the potential loss of the property arising from the foreclosure. In our judgment, this result is within the reasonable contemplation of the respondents in consenting to the creation of the charge pursuant to cl 5.34 of the SPA.
[53] In our judgment, the aforesaid risk did not pass to the appellant under the LACA. It must be emphasised that the LACA is a loan agreement. It is in the nature of a contract between the appellant and the respondents where the appellant agreed to grant to the respondents a loan in exchange for the repayment of that loan with interest. It is as simple as that. It cannot be denied that the purpose of the loan is to partially finance the purchase of the property. But this does not change the fact that the nub of the loan was nothing more than an advance of money by the appellant to the respondents in consideration of its repayment coupled with interest. The root of the loan transaction is not the property itself because the property merely serves as a security for the repayment of the loan. Seen in this context, the LACA cannot be frustrated even if the SPA with the developer is frustrated, which is not the case here. It must be reiterated that the LACA stands independently from the SPA. In our judgment, the performance of the obligations under the LACA does not become impossible even if the SPA between the developer and the respondents is frustrated...."


Malaysia-Building contract-common issues

In the Federal Court case of Globe Engineering Sdn Bhd v Bina Jati Sdn Bhd [2014] MLJU 604,  it was held that:-

"[1] In this appeal, the questions of law for determination are prolix. In verbatim, the Meave questions' read as follows.

[1] Whether the 'pay-when-paid' provision as found in clause 11(b) of the Sub-Contract between the Main Contractor (the Respondent) and the Sub-Contractor (the Applicant) and in paragraph 14 of the pre-Sub-Contract Letter of Award, the material part of which reads:

Clause 11(b) of the Sub-Contract -
Within seven (7) days of the receipt by the Contractor from the Employer of the amounts included under on (sic.) Architect's Certificate for which the Contractor has made an application under Clause 11(a), the Contractor shall notify and pay to the Sub-Contractor the total value certified therein...less: i) Retention money, that is to say the proportion attributable to the Sub-Contract Works of the amount retained by the Employer in accordance with the Main Contract..; and ii) The amounts previously paid.'
Paragraph 14 Letter of Award -
Payments - Back to back basis. Within seven (7) days upon [the Contractor] receiving from the Client [Employer], "Sum Projects (Brothers) Sdn. Bhd.

is a provision that merely fixes the time of payment of the amount included under the Architect's Certificate as attributable the Sub-Contract Works namely seven days from the date of receipt of such payment by the Main Contractor from the Employer without absolving the Main Contractor from its liability to pay the Sub-Contractor, or, is otherwise a provision which prescribes the Main Contractor's liability to pay the Sub-Contractor as subject to or conditional upon the actual receipt of such payment from the Employer, regard being had to the conflicting decisions of the Court of Appeal in Antah Schindler Sdn Bhd v Ssyangyong Engineering & Construction Co Ltd [2008] 3 CLJ 641 and Asiapools (M) Sdn Bhd v DM Construction Sdn Bhd [2010] 3 CLJ 641.

[2] Looked at in the light of what Clause 19 of the Sub-Contract says in the first part:-

"If for any reason the Contractor's employment under the Main Contract is determined (whether by the Contractor or by the Employer and whether due to any default of the Contractor or otherwise), then, the employment of the Sub-Contract under this Sub-Contract shall thereupon also be determined..;"

Whether in this scenario the unaccrued rights and liabilities of the parties under the "pay-when-paid' provision of clause 11(b) read together with paragraph 14 of the Letter of Award and under Clause 11(c) of the Sub-Contract which provides for payment of retention money upon issue of a certificate by the Architect (clause 11(c) is reproduced below) will also have to be discharged or come to an end [upon termination of the Sub-Contract under clause 19]. And, if so, whether on termination of the Sub-Contract there is substituted for the "pay-when-paid" and the clause 11(c) provision a right to payment under the purview of clause 19 which states in the second part 'and the Sub-Contractor shall be entitled to be paid:- (i) the value of the Sub-Contract Works completed at the date of such determination such value to be calculated according to Clause 10 of the Sub-Contract...and (ii)...(iii)...(iv)...and (v)....

Clause 11(c) of Sub-Contract
The Retention Money referred to above shall be dealt with in the following manner: on the issue by the Architect of any certificate or duplicate copy thereof which includes in accordance with the Main Contract the amount or any part thereof retained by the Employer under the Main Contract the Contractor shall pay to the Sub-Contractor such part of the retention money as is included in the certificate or duplicate copy thereof (with interest if any).

[3] Whether upon termination of the Sub-Contract in accordance with Clause 19 of the Sub-Contract (due to the termination of the Main Contractor's employment under the Main Contract), the Sub-Contractor's entitlement to be paid in Clause 19 of the Sub-Contract for (among others) the total value of Sub-Contract works completed on the date of termination is subject to or conditional upon actual receipt of such payment from the Employer....[34] Accordingly, our answers to the leave questions are as follows:

Answer to question [1]: upon its proper construction, the instant so called pay-when-paid clause was a provision that merely fixed time for payment but did not absolve the Respondent of liability to pay the amount certified and attributable to the work executed by the Appellant.

Answer to question [2]: upon termination of the sub-contract, all rights and liabilities were governed by clause 19.

Answer to question [3]: upon termination of the sub-contract, the entitlement of the Appellant to be paid in accordance with clause 19 was not contingent upon actual receipt by the Respondent of such payment from the employer...."

Malaysia-Evidence Act, 1950 do not apply to affidavit evidence

In Amanah Raya Capital Sdn Bhd v Siti Zaharah bt Sulaiman [2013] MLJU 490, it was held that "[25] The Defendant further submitted that the Plaintiff was bound to provide a certified true copy of the exemption in accordance with section 76 and 77 of the Evidence Act 1950. It is trite that in matters involving affidavit evidence such as the present, the provisions of the Evidence Act have no application...."

Malaysia-Director's fiduciary duties

In Petra Perdana Bhd v Tengku Dato' Ibrahim Petra bin Tengku Indra Petra & Ors [2014] 11 MLJ 1, it was held that "[219] A company director is recognised as having a fiduciary relationship with his company. As stated in Ford's Principles of Corporations Law in Chapter 8 at para [8.050] at p 312, a director is therefore subject to the fiduciary's duty of loyalty and the duty to avoid conflicts of interest. Case-law establishes under the scope of a director's fiduciary duty that he must exercise his powers bona fide and in the best interests of the company as a whole. This is similar to, and captured by the duties imposed by statute (see s 132(1)). The essence of the fiduciary duty is a duty to act bona fide in the interests of the company and not for a collateral purpose (see In re Smith and Fawcett, Limited [1942] Ch 304 at pp 306 and 308 and Multi-Pak Singapore Pte Ltd (in receivership) v Intraco Ltd & Ors [1994] 2 SLR 282 at p 287). Although the directors are vested with powers which carry implicitly some degree of discretion, such powers must be exercised bona fide, meaning for the purpose for which they were conferred and not arbitrarily or at the will of the directors, but in the interests of the company (see Greenhagh v Ardene Cinemas Ltd [1951] Ch 286 at p 291; Blackwell v Moray and Anor (1991) 3 ACSR 255)...."

Malaysia-Statutory interpretation

In Positive Vision Labuan Ltd v Ketua Pengarah Hasil Dalam Negeri and other appeals [2014] MLJU 618, it was held that "[34] However we also refer to the case of Palm Oil Research And Development Board Malaysia & Anor v Premium Vegetable Oils Sdn Bhd [2004] 2 CLJ 265, where Steve Shim CJ (Sabah & Sarawak) said inter alia as follows:

With respect, the principle of strict interpretation of statutes enunciated by Rowlatt, J could not be regarded as the locus classicus on the issue.

In his judgment Steve Shim CJSS referred to the judgment of Lord Wilberforce in W.T. Ramsay Ltd v Inland Revenue Commission [1982] AC 300 where he said as follows:
A subject is only to be taxed on clear words, not on 'intendment' or on the 'equity' of an Act ... What are 'clear words' is to be ascertained on normal principles; these do not confine the courts to literal interpretation. They may, indeed should, be considered in the context and scheme of the relevant Act as a whole, and its purpose may, indeed should, be regarded ...
This is known as the Ramsay Principle. While clear words are needed before a tax can be imposed, what those words are would be interpreted in line with the purposive approach.

In the same case Haidar Mohd Noor, CJ (Malaya) said that s 17A of the Interpretation Acts 1948 and 1967 is a statutory recognition for the courts to take a purposive approach in the interpretation of statutes including taxing statutes. The case of Palm Oil Research And Development Board Malaysia & Anor v Premium Vegetable Oils Sdn Bhd is thus authority that the court is under a duty to adopt an approach that promotes the purpose or object underlying a particular statute including taxing statutes.
[35] We further refer to the case of Generation Products Sdn Bhd v Majlis Perbandaran Klang [2008] 5 CLJ 417 (FC), where it is held that a statute has to be read in the correct context and the interpretation of the meaning of the statutory words used should coincide with what Parliament meant to say. In that case Zaki Tun Azmi, PCA said as follows:

I am drawn to the House of Lords judgment of Lord Simon of Glaisdale, in Farrell v Alexander [1976] 2 All ER 721, at pp. 735-736, where he discussed the question of reading the statute in the correct context:
Since the draftsman will himself have endeavoured to express the parliamentary meaning by words used in the primary and most natural sense which they bear in that same context, the court's interpretation of the meaning of the statutory words used should thus coincide with what Parliament meant to say.
...
The first or 'golden' rule is to ascertain the primary and natural sense of the statutory words in their context, since it is to be presumed that it is in this sense that the draftsman is using the words in order to convey what it is that Parliament meant to say. They will only be read in some other sense if that is necessary to obviate injustice, absurdity, anomaly or contradiction, or to prevent impediment of the statutory objective. It follows that where the draftsman uses the same word or phrase in similar contexts, he must be presumed to intend it in each place to bear the same meaning. 
(emphasis added)

[36] In ascertaining legislative intent in the interpretation of a statute, reference must be made to the words appearing in the statute for, prima facie, every word appearing in a statute must bear some meaning. This is clearly explained by the Federal Court in the case of Krishnadas Achutan Nair & Ors v Maniyam Samykano [1997] 1 CLJ 636 as follows:

The function of a Court when construing an Act of Parliament is to interpret the statute in order to ascertain legislative intent primarily by reference to the words appearing in the particular enactment. Prima facie, every word appearing in an Act must bear some meaning. For Parliament does not legislate in vain by the use of meaningless words and phrases. A judicial interpreter is therefore not entitled to disregard words used in a statute or subsidiary legislation or to treat them as superfluous or insignificant. It must be borne in mind that:
As a general rule a Court will adopt that construction of a statute which will give some effect to all of the words which it contains, per Gibbs J in Beckwith v R [1976] 12 ALL ER 333, at p. 337."

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