DALAM MAHKAMAH TINGGI MALAYA DI KUALA LUMPUR
[BAHAGIAN RAYUAN DAN KUASA-KUASA KHAS]
PERMOHONAN UNTUK SEMAKAN KEHAKIMAN NO. R2(4)-22-05-10
ANTARA
1. DATO’ VKK TEAGARAJAN A/L VK KALYANASUNDRAM
2. DR. SUPPIAH A/L VEERASAMY
3. SURESH GORASIA A/L JAYANTILAL GORASIA
4. KIRAN A/L DHIRAJLAL
5. DATO’ SHANMUGANATHAN A/L VELLANTHURAI
… PEMOHONPEMOHON
DAN
1. DATUK K. KETHEESWARAN
… RESPONDEN-
2. PENDAFTAR PERTUBUHAN MALAYSIA
… RESPONDEN
JUDGMENT
Mohd Zawawi Salleh, J:
The Reliefs Sought
[1]
In the Writ and Statement of Claim dated 4 June 2010,
the Plaintiffs essentially claim for declaratory and consequential
relief relating, inter alia, to the interpretation of the Constitution
1
of the Malaysian Associated Indian Chambers of Commerce &
Industry (“MAICCI”).
[2]
In more detail, the Plaintiffs pray for the following orders:
(a) In prayers (i), (ii) and (iii), the Plaintiffs pray for
declaration that the Special Delegates Conference
(“SDC”) convened on 15.1.2010 is valid and
binding on the members of MAICCI and that the
Plaintiffs be put in power of MAICCI;
(b) In prayer (iv), (v), (vi) and (vii), Plaintiffs pray that
the Annual Delegates Conference (“ADC”) of
MAICCI dated 16.1.2010 is illegal, null and void
and all decisions taken by MAICCI pursuant to the
ADC on 16.1.2010 is consequently illegal, null and
void; and
(c) In prayers (ix) and (xii), the Plaintiffs pray that the
Plaintiffs be given control of MAICCI’s bank
accounts and office premises to the exclusion of
the present office bearers.
[3]
In enclosure (3), the Plaintiffs pray that:
2
(a) in prayer (i), the First Respondent and/or any other
party be restrained from taking any further steps to
convene the ADC on 27.6.2010; and
(b) in prayer (ii), the First Defendant and/or any other
party be restrained from taking any steps in the
name of MAICCI, including but not limited to, acts
concerning expulsions or suspensions.
Factual Antecedents
[4]
The factual antecedents relating to the Plaintiff’s claim
are set out in paragraphs 5 to 54 of the Plaintiff’s First Affidavit
(Enclosure (4)).
The salient facts may be summarised as
follows:
(a) the Plaintiffs were unhappy with the decisions taken
by MAICCI in its Press Release dated 23.1.2009
wherein MAICCI expressed its disagreement with
HINDRAF when HINDRAF, inter alia, called for the
Indian Government to impose trade sanctions
against Malaysia;
(b) On 11.2.2009, five (5) State members (Perak,
Terengganu, Melaka, Labuan, Kedah and Sabah)
requisitioned for a Special Delegates conference
(“the SDC”) calling for:
3
(i)
the resignation of all the office bearers of
MAICCI; and
(ii) an Interim committee to be set up at the
Council Meeting on 13.2.2009 to manage
MAICCI and to set the agenda for the SDC
to decide on item (a) above.
(c) On 13.2.2009, at the 4th Management Council
Meeting “MCM”), the following were recorded:
(i)
two (2) of the State members (Perak and
Terengganu)
did
not
confirm
their
requisitions for the matters stated in (b); and
(ii) the positions of the three (3) Council members
that resigned on 3.2.2009 was addressed
and three (3) others were appointed in their
place.
(d) On 23.9.2009, at the 5th MCM were held confirming
the position recorded at the 4th MCM;
(e) On 5.10.2009, the Plaintiffs’ went ahead and formed
an Interim Committee so that they could call for
the SDC. The Interim Committee was formed on
the purported basis that the EXCO is defunct.
4
(f) On 14.11.2009, at the 6th MCM was called. This
council meeting was attended by eight (8) out of
twelve (12) State members.
Sabah, Melaka,
Labuan and Kedah were absent. At the 6th MCM it
was decided that:
(i)
the ADC be held on 16.1.2010; and
(ii) the Council will issue a show cause against
the President of Sabah and in the event he
fails to offer any reasonable explanation,
then the Council will address the matter at
the ADC on 16.1.2010.
(g) On 15.1.2010, the Interim Committee called for an
SDC, the Plaintiffs’ purportedly elected themselves
into power primarily with the support of Labuan,
Kedah, Sabah and Melaka;
(h) On 16.1.2010, MAICCI called for a properly
constituted ADC. This meeting was attended by
eight (8) of twelve (12) State members. Sabah,
Melaka, Labuan and Kedah were absent. At this
ADC,
Sabah
was
members.
5
removed
as
an
affiliate
(i)
On 7.4.2010, at the 11th Management Council
Meeting, the Plaintiffs were barred from attending
future ADC’s Management Council Meeting or
contest any positions in MAICCI until further
notice. This decision was unanimous by all States
and Council members because the Plaintiffs had
acted against the interest of MAICCI.
(j)
On 31.5.2010, at the 12th Management Council
Meeting, the decision of the States and Council
members with respect to the suspension was
confirmed.
Submission of the First Respondent
[5]
Learned counsel for the First Respondent submits that
enclosure (3) should be dismissed for the following reasons:
(a) the Plaintiffs have not cited the proper parties to the
suit;
(b) the Interim Committee established by the Plaintiffs
on
5.10.2009
is
ultra
vires
the
MAICCI
Constitution;
(c) the SDC on 15.1.2010 is illegal and unlawful.
Therefore, all resolutions passed and decisions
taken at the SDC is illegal and unlawful;
6
(d) the decision to bar the Plaintiffs until further notice
was confirmed by MAICCI;
(e) the present Council has been confirmed by the
delegates and the Second Defendant;
(f) the Second Defendant and the Constitution of
MAICCI have called for the ADC to be held on or
before 30.6.2010; and
(g) the Plaintiffs are seeking final relief and have not
satisfied the test for the injunction.
Should this
Court grant the injunction, the operations of
MAICCI will be frozen and this will affect third
parties rights.
Findings of the Court
[6]
Learned counsel for the First Respondent submits that
the Writ and Statement of Claim states the First Respondent is
being sued in his personal capacity as the former President of
MAICCI. The Writ and Statement of Claim also does not cite
any other office bearer of MAICCI as a defendant.
[7]
For the Plaintiffs, learned counsel submits that MAICCI
is an association of individuals or persons and the suit arises
out of grievances with the conduct of the First Respondent, the
7
former President of MAICCI, relating to the management of
MAICCI. Therefore, the First Respondent and by extension the
MAICCI is amenable to an injunction. (See The Taff Vale
Railway Co v The Amalgamated Society of Railway
Servants [1901] AC 426 (HL); Lee Thye (as President and
Office bearer of the Selangor Yan Keng Benevolent
Dramatic Association) v Tan Sri Ngan Ching Wen (as
President and office bearer of the Selangor Chinese
Assembly Hall) [1999] 6 MLJ 390)
[8]
Now, section 9(c) of Societies Act 1966 provides as
follows:
“a society may sue or be sued in the name of such
one of its members as declared to the Registrar
and registered by him as the public officer of the
society for that purpose, and if no such person is
registered, it shall be competent for any person
having a claim or demand against the society to
sue the society in the name of any office bearer of
the society”.
[9]
The effect of section 9(c) of the Societies Act 1996 has
been explained by the Federal Court in the case of Lee Tak
Suan & Anor v Tunku Dato Seri Shahabudin & Ors [2009] 4
CLJ 365 as follows:
8
“13.
As to the right to sue and liability to be used,
according to section 9(c) of the Act a society may
sue or be sued in the name of the member who is
its registered public officer or, if there is no
registered public officer, in the name of an officerbearer of the society. The person in whose name
the society sues or is sued is stated in section
9(e)(ii) as suing or being sued “on behalf of the
society”. This means that although the suit is not
in the society’s name, it is still a suit by or against
the society, but through its agent. This is further
borne out by the fact that section 9(e)(i) and (ii)
emphasizes that where a suit against a registered
society succeeds, the judgment is enforced not
against the person or property of the person in
whose name the society is sued but “against the
property of the society”, which fact in turn signifies
that a society is recognized as a property-owning
entity, as is also the fact that where a registered
society sues a member and loses, according to
the proviso to section 9(f) the successful member
may recover his costs either from the person in
whose name the society sues or from the society
itself, in which case the successful member may
have execution “against the property of the
society”.
9
[10] The Court would agree with the submission of learned
counsel for the First Defendant that the relief sought by the
Plaintiffs can only be granted against MAICCI. Therefore, an
officer bearer of MAICCI (recognized in the ADC of 16.1.2010)
must be cited as a defendant with the appropriate endorsement
concerning his capacity. The Plaintiffs have failed to name the
appropriate defendants in this suit. Order 3(1)(b) of the Rules
of the High Court 1980 provides:
“3(1)
Before a writ is issued it must be
indorsed –
….
(b) where a defendant is sued in a representative
capacity, with a statement of the capacity in
which he is sued.”
[11]
The Court has to bear in mind that the dispute is
between individual members of MAICCI. It is well-established
principle that, provided that the acts of the management are
within the powers of the society, any dispute between individual
members of the society and those responsible for its
management must be decided by the machinery provided by
the rules and not in a Court of law. If disgruntled members
were allowed to air their domestic grievances in Court, orderly
management of the affairs of societies and corporation would
be impossible. If the society as a whole does not approve of
10
the acts of its management, it has every power by summoning
a general meeting and passing a resolution to correct and
control
the
acts
of
the
management
(see
Kowtha
Suryanarayana Roa v Patibandla Subrhamanyam, AIR 1940
Mad 902, Nelson’s Law of Injunctions at page 100; Wong
Lok Khiam v Dato Peter Lo Su Yin [1972] MLJ 166).
[12]
In the case of S. Krishnaswamy and others v South
India Film Chamber of Commerce and other, reported in AIR
1969 MADRAS 42, the Court set out parameters for the court’s
interference in the following lines, which is found at para 14:
“14.
…. In the case of Clubs and Societies
registered under the Societies Registration Act,
the general principles governing the right of suit of
an individual share holder or a member of the
Company would apply and ordinarily the Court will
not interfere with the internal management of the
Society at the instance of one or some only of the
members of the Society subject to well recognised
exceptions (1) where the impugned act is ultra
vires of the Society, (2) the act complained of
constitutes fraud or (3) where the impugned action
is illegal…”.
[13]
Learned counsel for the Plaintiff argues that –
11
(a) seven (7) Member States (“the Affected States”)
requisitioned for a SDC by letters dated between
11 and 18 February 2009. This was more than the
one third minimum requirement set out in Article
10(1). The SDC should have been held by May
2009;
(b) by letters dated 9 June 2009, 13 July 2009 and 14
August 2009, the Affected States wrote to the
Second Defendant seeking its intervention to
compel the First Defendant to convene the SDC;
(c) in the meantime, the Second Defendant only
granted the First Defendant and/or to MAICCI an
extension of time until December 2009 to hold the
ADC for 2009, which should have been held by 30
June 2009;
(d) by a letter dated 9 September 2009, the Second
Defendant issued a letter notifying MAICCI that
the Second Defendant had received numerous
complaints from Member States in respect of the
failure by MAICCI to convene a SDC as
requisitioned in accordance with Article 10(1) of
the Constitution and requiring MAICCI to act upon
the requisition in accordance with the Constitution;
12
(e) the First Defendant and/or MAICCI still failed and/or
refused to convene a SDC which compelled the
Affected States to hold a meeting on 5 October
2009 at which an Interim Committee (“the Interim
Committee”) was established to convene the SDC
in accordance with Article 10(1);
(f) by notices dated 24 December 2009, the Interim
Committee
issued
notices
to
the
Second
Defendant and to all Member States of the SDC to
be held on 15 January 2010 for the purpose, inter
alia, of passing a resolution of no confidence
against the First Defendant, for the election of
fresh office bearers for the remainder of the 2008
– 2010 term and for the fixing of the date for the
ADC for the years 2009 and 2010;
(g) on 14 January 2010, the Second Defendant caused
to be issued to MAICCI a statement pursuant to
Section 13(2) of the Societies Act 1966 requiring
MAICCI to show cause why its registration should
not be cancelled in view of breaches of Article
19(a) of its Constitution as it had failed, refused
and/or neglected to hold its ADC before 30 June
2009 and of Article 10(1) as it had failed, refused
and/or neglected to convene a SDC within the
prescribed time;
13
(h) on 15 January 2010, the SDC was held, at which
the following matters were decided:
(i)
a resolution of no confidence was passed
against the First Defendant;
(iii) election were held for the positions of
President,
Deputy
President,
Secretary
General, Assistant Secretary General and
Treasurer wherein the First to the Fifth
Plaintiffs were elected respectively;
(iv) the ADC for 2009 and 2010 would both be
held on 19 June 2010.
[14]
To my mind, in order to determine the issue whether the
Interim Committee established on 5.10.2009 is intra vires the
MAICCI Constitution, a reference should be made to the
MAICCI Constitution as in Exhibit “A1”. It is trite law that the
terms of the MAICCI Constitution bind its members inter-se.
[15]
The law on this subject is very clear.
The Supreme
Court of India vide its decision in T.P. Daver v. Lodge Victoria
reported in AIR 1963 SC 1144, in paragraph 9 of its judgment,
has held as follows:
14
“9. The following principles may be gathered from
the above discussion. (1) A member of a Masonic
lodge is bound to abide by the rules of the lodge;
and if the rules provide for expulsion, he shall be
expelled only in the manner provided by the rules.
(2) the lodge is bound to act strictly according to
the rules whether a particular rule is mandatory or
directory falls to be decided in each case, having
regard to the well settled rules of construction in
that regard. (3) The jurisdiction of a civil court is
rather limited; it cannot obviously sit as a court of
appeal from decisions of such a body; it can set
aside the order of such a body, if the said body
acts without jurisdiction or does not act in good
faith or acts in violation of the principles of natural
justice as explained in the decisions cited supra”.
(See also the case of Dato Hj Talaat bin Hj
Hussin v Chak Kong Yin [2004] 2 MLJ 295).
[16]
It would appear that there is no provision in the MAICCI
Constitution that allows for an Interim Committee. Therefore,
the Interim Committee is ultra vires the MAICCI Constitution
and void and all decisions reached by the Interim Committee
must therefore invalid.
15
[17]
Concerning the SDC which was convened as a result of
the Interim Committee, the Court is of the considered opinion
that it is unlawful because:
(a) the
four
(4)
members
minimum
requisition
requirement was not met;
(b) the SDC was not quorate; and
(c) alternatively, the SDC was not held within 90 days
from the date of requisition.
[18]
Clause 10(1) of the Constitution of MAICCI provides as
follows:
“Special Delegates Conference of MAICCI shall be held
upon:
(i)
the decision of the Council; or
(ii) the request of one third or more of the total number
of State members in benefit on a date to be fixed by
the Council…”
[19]
The four (4) State members requisition requirement was
not met because:
16
(a) MAICCI has twelve (12) State Members. In order to
requisition a SDC, one third of the twelve (12)
State
members
must
requisitioning a SDC.
pass
resolutions
Therefore, a minimum of
four (4) State members are required;
(b) During the 4th and the 5th Management Council
Meeting
held
on
13.2.2009
and
23.9.2009
respectively, Perak and Terengganu did not
consent to the requisitions;
See:
Minutes of 4th Management Council
Meeting dated 13.2.2009 marked as
Exhibit “KK-14” at page 160 of the 1st
Defendant’s 1st Affidavit.
See:
Minutes of 5th Management Council
Meeting dated 23.9.2009 marked as
Exhibit “KK-43” at page 122 of the 1st
Defendant’s 2nd Affidavit.
See:
Withdrawal
letters
from
Perak
and
Terengganu dated 11.9.2009 marked as
Exhibit “KK-44” at page 135 of the 1st
Defendant’s 2nd Affidavit.
17
(c) KL & Selangor’s requisition cannot be taken into
account because it exited from MAICCI on
19.2.2009 (6th Management Council Meeting).
Melaka’s requisition also cannot be taken into
account because it was received on 1.9.2009.
See:
Paragraph 3.0 of the Minutes of 5th
Management Council Meeting dated
23.9.2009 marked as Exhibit “KK-43” at
page 122 of the 1st Defendant’s 2nd
Affidavit.
See:
Paragraph 7.10.2-7.10.4 and 7.10.9 of
the Minutes of 6th Management Council
Meeting dated 14.11.2009 marked as
Exhibit “KK-15” at page 171 of the 1st
Defendant’s 1st Affidavit.
[20]
The quorum requirement for a SDC is set out in Clause
10(k) of the MAICCI Constitution as follows:
“Clause 10(k): Quorum
for
Delegates
Conference.
A quorum shall be considered as having been
formed, provided that the delegates present,
18
irrespective of their total numbers, represent at
least half of the State members”.
See:
Clause 10(k) of the MAICCI Constitution
of Exhibit “KK-9” of 1st Defendant’s
Affidavit.
[21]
Clause 10(k) applies to both ADC’s and SDC’s alike.
Simply put, Clause 10(k) provides that in order for there to be
quorum, each and every State must have at least half of their
members present.
[22]
During the SDC on 15.01.2010, there were six (6) States
present. The delegates from the six (6) States did not meet the
quorum requirements because they did not have half of their
delegates present:
(a) Kuala Lumpur
& Selangor
[23]
- 5 members out of 12 members
(b) Perak
- 2 members out of 7 members
(c) Melaka
- 5 members out of 7 members
(d) Labuan
- 4 members out of 7 members
(e) Kedah
- 7 members out of 7 members
(f)
- 7 members out of 7 members
Sabah
Only Melaka, Labuan, Kedah and Sabah had met the
requirements. Therefore Clause 10(k) is not met.
19
See:
Minutes of SDC held on 15.1.2010 at Exhibit
“KK-28” at page 310 of the 1st Defendant’s 1st
Affidavit.
[24]
Since the SDC was convened on the basis of non-
compliance with MAICCI Constitution, all decisions reached by
the Interim Committee are therefore null and void and of no
effect.
[25]
Concerning the decision to expel Sabah and suspension
of the Plaintiff, it would appear that the decision has been
confirmed by the Council and the members. On 7.4.2010, at
the 11th MCM, the Plaintiffs were barred from attending future
ADC’s Management Council Meetings or contest any positions
in MAICCI until further notice. This decision was unanimous by
all States and Council members.
On 31.5.2010, at the 12th
Management Council Meeting, the decision of the States and
Council members with respect to the suspension was
confirmed. The Council members have been confirmed by the
State members. The decision of the State members should not
be interfered with unless the respective members have been
cited as Defendants and have had an opportunity to address
the Court. (See Wong Lok Khiam v Dao Peter Lo Su Yin &
Ors (No. 2) [1972] 1 MLJ 166; Matang Holdings Bhd & Ors v
Dato Lee San Choon & Ors [1985] MLJ 406).
20
[26]
In Enclosure 3, the Plaintiff’s pray for orders that
completely remove the powers vested in the First Defendant
and the present elected Council. In effect this amounts to final
relief because:
(a) it directly endorses the SDC on 15.1.2010;
(b) it directly endorses the illegality of the ADC on
16.1.2010; and
(c) it directly puts one fraction into power over the other
irrespective of the wishes of the members.
[27]
In the usual application for an injunction, the Court will
adopt the test as set out in American Cyanamid Co v Ethicon
Ltd [1975]1 AII ER 504 and as applied in Keet Gerald Francis
Noel John v Mohd Noor
@ Harun bin Abdullah &
Ors
[1995] 1 CLJ 293. The application of this test requires the
Court to consider whether there are serious issues to be tried
and where the justice of case lies. However, in a situation such
as this instant case, the test for an injunction is not the
American Cyanamid Test. The appropriate test is set out in the
case of Roxy Electric v Syarikat Nominee Bumiputra S/B
[1989] 3 MLJ 231 as follows:
“where the grant or refusal of an interlocutory
injunction would have the practical effect of putting
21
an end to an action, the court should approach the
case on the broad principle of what it can do in its
best endeavor to avoid injustice and to balance
the risk of doing an injustice to either party. In
such a case the court should bear in mind that to
grant an injunction sought by the Plaintiff would
mean giving him judgment in the case against the
Defendant without permitting the Defendant the
right of trial.
Accordingly, the established
guidelines requiring the court to look at the
balance of convenience when deciding whether to
grant or refuse an interlocutory injunction do not
apply in such case, since whatever the strengths
of either side, the Defendant should not be
precluded by the grant of an interlocutory
injunction from disputing the Plaintiff’s claim at
trial”.
[28]
In Datuk Johari Abdul Ghani & Ors v QRS Brands
Bhd & Ors [2007] 1 CLJ 85, the Court of Appeal dissolved the
Respondent’s injunctions which, inter alia, restrained the
appellants from convening an EGM for the removal of directors
from the board of directors. The Court of Appeal per Gopal Sri
Ram, JCA (as he then was) applied the Cayne’s case and held
at page 102:
22
“In our judgment the effect of Cayne v. Global
Natural Resources and NWL Ltd. v. Woods is
simply this. In the ordinary case of an application
for an interim injunction, whether mandatory or
prohibitory, the test is whether there is a serious
question to be tried. If there is, and no injustice
would be occasioned by the grant of the injunction
then the balance of convenience would ordinarily
lie in favour of the grant of the injunction. This in
reality is a paraphrase of Lord Diplock’s seminal
dictum in American Cyanamid. However, cases,
though rare, may arise where the grant or refusal
of an injunction would terminate the litigation one
way or the other. In such cases, the American
Cyanamid test of “serious question to be tried”
does not apply. The Plaintiff seeking an injunction
in those circumstances must satisfy a higher
threshold. This is sometimes referred to as a
prima facie case (see Fellowes v. Fisher [1975] 2
AII ER 829) or a strong “prima facie case”
(Wakefield v. Duke of Buccleugh [1865] LT 628,
629; American Cyanamid Co v. Ethicon Ltd
[1975] AC 396) or “an unusually sharp and clear
case” (Shepherd Homes Ltd v. Sandham [1971]
1 Ch 340; Sivaperuman v. Heah Seok Yeong
23
Realty Sdn Bhd [1978] 1 LNS 184; [1979] 1 MLJ
150). Whether a high degree of assurance is felt
by a court in a case falling outside the American
Cyanamid
test
depends
on
the
facts
and
circumstances of each case”.
[29]
case,
The Court is of the considered opinion that in this instant
the
balance
of
convenience
would
favour
the
Respondents as the injunction would have the effect of:
(a) indefinitely postponing the ADC notwithstanding that
the
MAICCI
Constitution
and
the
Second
Defendant state that the ADC must be held on or
before 30.6.2010;
(b) freezing the operations of MAICCI; and
(c) resulting in MAICCI being in breach of its statutory
obligations and an express direction by the
Second Defendant.
This would effectively bring and end the society and result in its
deregistration.
24
[30]
Learned Federal Counsel appearing for the Second
Respondent submits that in the circumstances of this case, the
Plaintiffs have not shown that they have suffered any loss and
in any event, damages are an adequate remedy for any such
loss.
[31]
The Court is inclined to agree. It would appear that in
this instant case damages would be an adequate remedy.
Therefore, injunctive relief should be refused. (See First Crest
Global Ltd and Ors v Indexia Assets Ltd and Ors and
Another Appeal [2006] 3 CLJ 860).
Conclusion
[32]
The Court is of the considered opining that the risk of
doing an injustice is greater if the injunction is granted. Justice
demands that the MAICCI members be given the opportunity to
elect the office bears of their choice at the ADC, scheduled to
be held on 30.6.2010.
[33]
For the reasons stated above, the application (enclosure
(3)), being devoid of merit, must fail and is dismissed with
costs.
Dated: 23 JUNE 2010
25
(DATO’ HAJI MOHD ZAWAWI BIN SALLEH)
JUDGE
HIGH COURT MALAYA
KUALA LUMPUR
For the Plaintiff
: Mahathir Abdullah
Messrs Athi Seelan Mahathir & Partners
Advocates & Solicitors
Kuala Lumpur.
For the First
Respondent
: Prem Ramachandran
Messrs Kumar Partnership
Advocates & Solicitors
Kuala Lumpur.
For the Second
Respondent
: Cik Maisarah Juhari
Senior Federal Counsel
Jabatan Peguam Negara
Putrajaya.
26