DALAM MAHKAMAH TINGGI MALAYA DI JOHOR BAHRU
DALAM NEGERI JOHOR, MALAYSIA
SAMAN PEMULA NO. 24NCVC-184-09/2013
______________________________________________
Dalam Perkara
Pertubuhan 1966
Seksyen
2
Akta
Dan
Dalam Perkara Keahlian Gabungan
Pertubuhan-Pertubuhan Cina, Johor
Dan
Dalam perkara Aturan 7 dan Aturan 28
Kaedah-Kaedah Mahkamah 2012
ANTARA
PERSEKUTUAN TIONG-HUA JOHOR BAHRU
(NO. SYARIKAT: 34985-A)
…
PLAINTIF
DAN
LIM KAH CHUAN (NO. K/P: 630517-01-5237)
Presiden Gabungan Pertubuhan-Pertubuhan Cina,
Johor) bagi pihak Gabungan Pertubuhan-Pertubuhan
Cina, Johor
… DEFENDAN
DI HADAPAN
YANG ARIF TUAN GUNALAN A/L MUNIANDY
PESURUHJAYA KEHAKIMAN MAHKAMAH TINGGI
JUDGMENT
[1]
This is an application by Originating Summons („OS‟) wherein the
Plaintiff prays for the following declaratory orders:
“a)
a declaration that a limited company is qualified to become a
member of a society registered under the societies Act 1966
pursuant to the interpretation of “society” under Section 2 of
the Societies Act 1966.
b)
a declaration that at all material times, the Plaintiff is
qualified and is a lawful member of Gabungan PertuhuhanPertubuhan Cina, Johor.”.
Brief Background Facts
[2]
The history of this case dates to as far back as 1950 when the
Johor Bahru Chinese Association („JBCA‟) was registered as a society with
the Registrar of Societies on 6.06.1950. Gabungan Persatuan-Persatuan
China Negeri Johor („GPC‟) was registered as a society on 20.12.1950. It
subsequently changed its name to Gabungan Pertubuhan-Pertubuhan
China, Johor („the Defendant‟) on 20.10.1977.
[3]
Persatuan Tiong-Hua Johor Bahru („the Plaintiff‟) came into
existence on 20.10.1977 upon incorporation as a public company limited by
guarantee under the Companies Act, 1965 („CA‟). The sole purpose of its
incorporation was to take over the assets and to manage the affairs and
activities of JBCA. Thereafter, vide Form 6 dated 26.06.1979, JBCA made
an application to the Registrar of Societies („ROS‟) to have its certificate of
registration cancelled. JBCA was a member of GPC, the forerunner to the
Defendant, until the cancellation of its registration. Upon the deregistration
of JBCA, the Plaintiff was treated as a member of the Defendant. When
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another related society, Persatuan Tiong-Hua Tebrau, was registered as a
society with the Registrar of Societies, the Plaintiff allegedly staged a public
protest against its registration. At this point in time, the Defendant was
allegedly not aware that the Plaintiff was not a society registered with the
ROS nor that the Plaintiff was incorporated as a public company limited by
guarantee. It allegedly became aware of this fact only on 01.07.2013 when
the Plaintiff publicly demonstrated against the Defendant and also issued
press statements that the Defendant considered to be detrimental to its
image and reputation.
[4]
As a consequence of the above incident, the Defendant‟s
Committee held a meeting on 28.07.2013 during which a resolution was
passed to suspend the membership of the Plaintiff for two months. It was a
temporary suspension purportedly to facilitate investigation into whether the
Plaintiff was qualified to be a member of the Defendant as it was a public
company limited by guarantee and not a society registered with the ROS.
The Plaintiff was dissatisfied with the suspension order issued by the
Defendant‟s Committee. Hence, this application seeking legal redress for
the said declaratory orders.
[5]
Upon this action being instituted, the said Committee met again on
19.09.2013 and decided to extend the suspension of the Plaintiff‟s
membership.
Grounds of Application
[6]
a)
A letter dated 23.08.2013 from the office of the Registrar of
Societies, Johor clearly shows that the membership of the
Plaintiff in the Gabungan Pertubuhan-Pertubuhan Cina, Johor
is in accordance with the law and in compliance with the Rules
and Regulations of the Defendant.
b)
The Plaintiff‟s membership in the Defendant is an important
issue among the Chinese community in Malaysia and the
interpretation of provisions of the relevant laws, particularly
the Societies Act, 1966 („SA‟) is an issue involving the public
interest which is the subject-matter of this action.
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Issues for Determination
[7]
Based on the Plaintiff‟s prayers for the declaratory orders, the
issues that arose for decision were:
a)
Whether a public company is qualified to become a member
of a registered society within the definition of “society” under
section 2 of the Societies Act 1966?
b)
Whether the Plaintiff was at all material times qualified to be a
member of the Defendant?
Analysis of Issues and Evidence
First Issue
[8]
The declaration sought for in respect of this issue is of a general
character on a point of law. It does not concern the legal character or right
of the Plaintiff in respect of membership in the Defendant specifically. In
this regard the requirements of section 41 of the Specific Relief Act, 1950
[„SRA‟] on which the Plaintiff relies for the declaratory reliefs sought are of
utmost importance. The failure to satisfy the requirements thereof would
be fatal to the aforesaid declaration being granted.
[9]
Section 41 of the SRA provides that:
“Any person entitled to any legal character, or to any right as to
any property, may institute a suit against any person denying, or
interested to deny, his title to the character or right, and the court
may in its discretion make therein a declaration that he is so
entitled, and the plaintiff need not in that suit ask for any further
relief;
Provided that no court shall make any such declaration where the
plaintiff, being able to seek further relief than a mere declaration or
title, omits to do so.”.
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[10]
The declaration sought by the Plaintiff in this case is clearly on the
face of it of a general character going purely to an interpretation of the term
“society” under section 2 of the Societies Act. The words of section 41,
SRA are clear and unambiguous, without any elements of vagueness.
Hence, the words have to be read literally and given their natural and
ordinary meaning. In doing so, there can be no doubt that the power of the
court to make a declaration is subject to the person at whose instance the
application is made being entitled to any legal character or right having
instituted a suit against any person denying or being interested to deny his
title to the said character or right. Whether the declaration therein that the
Plaintiff is so entitled ought to be made is at the discretion of the Court. Put
another way, the declaration sought must be of a personal character
relating to his right or legal character in an action against a named party
alleged to have denied his entitlement to that legal character or right.
[11]
In the instant case, the dissatisfaction of the Plaintiff against the
Defendant stems from the latter‟s decision to suspend the Plaintiff‟s
membership pending further deliberation whether the Plaintiff as a public
company limited by guarantee and not a society registered with the ROS
was qualified to be a member of the Defendant. However, the declaration
sought by the Plaintiff applies generally to the qualification of any public
company to become a member of a registered society within the definition
of “society” under section 2, Societies Act, 1966. It is not specific to
qualification for membership in the Defendant, which is a legal character or
right alleged to have been denied by the Committee of the Defendant. In
essence, the Plaintiff is moving the Court to make a general declaration
pertaining to the eligibility of a public company incorporated and registered
under the CA to become a member of a registered society. It does not
particularly concern the Plaintiff‟s eligibility for or right to membership in the
Defendant. It is important to bear in mind that the prayer is not to declare
that the Plaintiff by virtue of its status as a public company is qualified to
become a member of a registered society nor that a public company is
entitled in law to be registered as a society under the Societies Act, 1966
(„SA‟).
[12]
The Defendant contended that the question whether a public
company is in law qualified or eligible to become a member of a particular
registered society would be dependent on the Rules and Regulations of
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that particular society that are binding on it. Notice should be taken of the
fact that the Rules and Regulations or Constitution of a society would
expressly lay down the necessary qualifications or requirements for
membership.
Hence, that a general declaratory order without any
reference to the Rules and Regulations or Constitution of any specific
society is not in accordance of the provisions of sections 41, SRA as the
Court would not be in a position to make an order of this nature since each
society would have its own qualifications or requirements on the eligibility
for membership.
[13]
In response, the Plaintiff invoked the wide discretionary powers of
the Court to make a declaratory order or judgment. Reference was made
to Order 15 Rule 16, Rules of Court 2012 („ROC‟), which states:
“Declaratory judgment (O.15 r.16)
No action or other proceeding shall be open to objection merely
on the ground that a declaratory judgment or order is sought
thereby, and the Court may make binding declarations of right
whether or not consequential relief is or could be claimed.”.
[14]
On the right of a party to seek recourse to the remedy of
declaration to resolve a dispute before it reaches the point where a lawful
right is infringed, the Plaintiff cited in support Gan Hwa Kian v. Shencourt
Sdn Bhd [2007] 3 CLJ 358, where Malik Ishak, J (as he then was) held,
inter alia:
“Now, declaration is a remedy that is often resorted to. It
developed vigorously by the common law courts, in due course. It
comes within the ambit of Administrative Law. The expanding
horizons of the remedy of declaration must be recognised. The
tide of judicial pragmatism is strong. It is slowly washing away the
marks of fertile dissent left by Lord Denning on the wide beaches
of the common law (see Breen v. Amalgamated Engineering Union
(now Amalgamated Engineering and Foundry Workers Union) and
others [1971] 2 QB 175, [1971] 1 All ER 1148). Edgar Joseph Jr
SCJ in Petaling Tin Bhd v Lee Kian Chan & Ors [1994] 2 CLJ 346,
sets out the two main virtues of a declaratory action: firstly, to get
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the desired relief before damage is caused, and, secondly, to seek
clarification of the legal position. Put differently, if someone wants
to settle disputes before they reach the point where a right is
infringed then that someone should seek the remedy of a
declaration (see P.W. Young, Declaratory Orders [1975]). So, a
declaratory judgment merely states the rights or legal position of
the parties as they stand without altering them in any way. Statute
wise, it is ideal to refer to s. 41 of the Specific Relief Act 1950 (Act
137) and O.15 r.15 of the rules of the High Court 1980. According
to the late Lee Hun Hoe CJ, (Borneo) in Datuk Syed Kechik bin
Syed Mohamed v. Government of Malaysia & Anor [1979] 2 MLJ
101, 107:
The prevailing view seems to be that the court‟s jurisdiction to
make a declaratory order is unlimited subject only to its own
discretion.”.
[15]
In my considered view, the general declaratory order sought in the
first prayer did not meet the requirements of section 41, SRA. The
question whether a public company is qualified or eligible to become a
member of a particular registered society such as GPC is dependent wholly
on the Rules and Regulations or Constitution governing its operation. I
upheld the contention of the Defendant that the general declaratory order
prayed for is untenable as it would be tantamount to ignoring the eligibility
for membership to any particular society. The declaration sought calls
upon the Court to decide on the qualification or eligibility of membership of
an illusory or non-existent society. A general declaration of this nature
seeking purely interpretation of provisions of the law, specifically section 2
of SA, without reference to any legal character or to any right is not the
declaratory relief envisaged in section 2, SA to remedy the aforesaid
infringement. A declaration made without considering the Rules and
Regulations or Constitution of the Defendant would, therefore, be in
contravention of the clear and express terms of section 41, SRA and ought
to be rejected.
Second Issue
[16]
The declaration pertaining to this issue sought by the Plaintiff is
that it was at all material times qualified to be a member of the Defendant.
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[17]
It was an admitted fact that the Plaintiff is not a society registered
under the SA but incorporated as a public company limited by guarantee
under the CA. Section 6(1), SA makes it mandatory for all local societies to
be lawful to be registered with the Registrar of Societies. Section 6(1), SA
reads:
“Every local society other than that in respect of which an order
made under section 5 is in force shall, in the manner prescribed
make application to the Registrar for registration under this Act.”.
[18]
Section 2, SA defines „local society‟ as:
“ “local society” means any society organized and established in
Malaysia or having its headquarters or chief place of business in
Malaysia, and includes any society deemed to be established in
Malaysia by virtue of section 4;”.
The same section defines “society” as:
“ “society” includes any club, company, partnership, or association
of seven or more persons whatever its nature or object, whether
temporary or permanent, but does not include –
(a) any company registered under the provisions of any written
law relating to companies for the time being in force in
Malaysia;”.
[19]
The Defendant drew the Court‟s attention to the chronology of
events that purportedly made it crystal clear that the Plaintiff and Johor
Bahru Chinese Association („JBCA‟) were not one and the same but
separate and distinct legal entities. JBCA which was registered as a
society with the ROS on 06.06.1950 was a member of the Defendant right
from the latter‟s inception upon registration as a society on 20.12.1950 until
its deregistration.
[20]
The Plaintiff, however, only came into existence on 20.10.1977
upon incorporation as a public company limited by guarantee under the
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C/A. At the time of its incorporation, JBCA was still in existence and
ceased to exist only about 20 months later when on 29.06.1979 it applied
vide Form 6 to the ROS for cancellation of its registration. Each of them
has a different legal status: the Plaintiff a public company incorporated
under the CA while the Defendant a registered society under the SA. The
Defendant‟s case was that upon the deregistration of JBCA, the Plaintiff
throughout its history since its inception was merely treated as a member of
the Defendant without any formal application or decision on record being
made to admit it as such. The Plaintiff continued to be treated and
accepted as a member of the Defendant up to the point in time when the
Committee of the Defendant became aware of its status as a registered
public company and not a registered society.
[21]
Under the Rules and Regulations of the Defendant, the
qualification for membership in the society is any party which is a „Chinese
Association‟. Rule 4, provides:
“4. Membership: the Chinese Associations in various districts in
Johor State shall automatically be members.”.
[22]
The right to attend the Representatives General Meeting is subject
to payment of the prescribed fees. Unfortunately, as to what constitutes a
„Chinese Association‟ is not defined in the Rules. The Defendant
contended that „Chinese Associations‟ can logically only mean lawful
societies registered under the SA and cannot extend to an unregistered
Chinese Association which would be an unlawful association under the SA.
An unregistered “Chinese Association” would be regarded as an unlawful
society by virtue of section 41(1) (b), SA, the office bearers of which would
be committing an offence under section 42. Admission of an unlawful
society into its membership would undoubtedly expose the Defendant itself
to the risk of its certificate being cancelled by the Registrar.
[23]
The application for the present declaratory order as per the
second prayer stems from the suspension of the Plaintiff‟s membership in
the Defendant society. Being dissatisfied with the suspension order, the
Plaintiff sought recourse to the Court that it was qualified to be a member of
the society („Defendant‟). The Plaintiff did not seek an order to declare the
9
suspension order null and void which meant that the suspension order itself
was not the subject of dispute in this proceedings and remained valid. It is
essential to note that the order was for a temporary suspension only
pending determination whether the Plaintiff‟s qualification for membership
was affected by its status as a public company limited by guarantee and
not a lawful society registered with the ROS. A decision had yet to be
made whether its membership should be revoked. Hence, it would appear
that to seek a declaration at this juncture would be premature for the Court
to exercise its discretion to grant the order sought.
[24]
The subject of dispute was as to Plaintiff‟s eligibility for
membership in the Defendant arising from the latter‟s contention that 2 vital
criteria had to be satisfied for the Plaintiff to qualify for membership,
namely:
a)
Plaintiff must be a lawful society registered under the SA with
the ROS; and
b)
Plaintiff must be a Chinese Association within the meaning
and ambit of Rule 4 of the Defendant‟s Rules and
Regulations. According to the Defendant, none of the criteria
above had been met by the Plaintiff which vehemently
disputed the Defendant‟s assertion. The Plaintiff‟s case was
principally that eligibility for membership in the Defendant
society was not restricted to societies registered under the SA
but extended to any Chinese Association in the state of Johor.
As regards the second criterion which the Plaintiff had
allegedly failed to satisfy, it maintained that it indeed was a
Chinese Association as evident from its Articles and
Memorandum of Association and regarded as such
throughout its history by all and sundry despite being
incorporated as a public company.
[25]
From the aforesaid facts, it was, thus, obvious that there was a
dispute between the Plaintiff and the Defendant pertaining to the former‟s
right to membership in the society. This is clearly a dispute envisaged in
section 40 of the SA and has to be decided under the mechanism
prescribed in the section. Section 40 states:
10
“40. Decision of disputes.
(1)
A dispute between –
(a) a member or subscriber or person claiming
through a member or a subscriber or under the
rules of a registered society and the society or
an office-bearer thereof; and
(b) any person aggrieved who has ceased to be a
member of a registered society or any person
claiming through such person aggrieved, and
the society or an office-bearer thereof;
shall be decided in the manner directed by the rules of the
registered society; and the decision so given shall be binding
and conclusive on all parties without appeal, and shall not be
removable to any court or restrainable by injunction; and
application for the enforcement thereof may be made to a
Sessions Court.
(2) The parties to a dispute involving a registered
society may by consent refer the dispute to the Registrar.”.
[26]
Section 40, SA lays down the statutory formula for the resolution of
disputes, inter alia as to cessation of membership in a registered society.
Two avenues are provided for the resolution of any dispute referred to
therein, the first being in the manner prescribed by the rules of the
registered society and the second being by reference of the dispute to the
Registrar by consent. As statutory avenues are prescribed for settlement
of the dispute, I upheld the defence contention that the Plaintiff must resort
to these avenues and exhaust the remedies available before seeking
recourse to the Court for declaratory orders, failing which the Court would
not be justified in exercising its discretion under section 41(1), SRA to
make the orders.
[27]
It was undisputed that the Plaintiff had not invoked the appeal
procedure as provided for under Rule 24 of the Defendant‟s Rules and
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Regulations to appeal against the society‟s decision to suspend its
membership. Neither had it referred the dispute to the Registrar by
consent for resolution. The Plaintiff had, therefore, failed to exhaust the
statutory avenues and remedies adverted to before seeking recourse to the
Court for declaratory orders.
Conclusion
[28]
The law is settled that the Court should not exercise its discretion
under its original jurisdiction to give a declaratory judgment where
alternative remedies prescribed by statute have not been exhausted. I,
wholly agree with the proposition of law expressed by Shankar, J (as he
then was) in Nor Azlan b. Mad Azros & Anor v. Hj Jumaat Yusoff
(President) & Ors. [1990] ILR 206 as follows:
“I adopted that view in a similar situation of disputes between
members and the Executive Council (EXCO) of the Union and held
that it is trite law that a declaratory judgment cannot be given by
the court in the exercise of its original jurisdiction where the only
remedy open to the plaintiff is one prescribed by statute.”.
[See also Arjunan v. Kesatuan Kebangsaan Pekerja-Pekerja Ladang [1993]
1 MLJ 326 at p. 351 where Abu Mansor, J (as he then was) adopted the
above principle].
[29]
It is trite law that the power to grant a declaratory relief is a
discretionary one which should be exercised with care and caution and
granted sparingly and judiciously with regard to all the circumstances of the
case and the Court would hesitate to make a declaratory judgment where
alternative remedies are available under the law. [Law Kum Yoon v. The
Kim Huah [1979] 1 MLJ 83. In Caxton (Kelang) Sdn. Bhd. v. Susan Joan
Labrooy and Anor.[1988] 2 MLJ 604, Siti Norma J (as Her Ladyship then
was) quoted with approval from PW Young‟s Declaratory Orders, 2nd
Edition as follows:
“P.W. Young in his book on Declaratory Orders, 2nd Ed.,defines a
declaratory judgment as one that does not involve a cause of
12
action in the usual sense and that six factors must be present
before there can be declaratory order. These are:
(1)
There must exist a controversy between the parties;
(2)
The proceedings must involve a „right‟;
(3)
The proceedings must be brought by a person who has
a proper or tangible interest in obtaining the order, which
is usually referred to as „standing‟ or „locus standi‟;
(4)
The controversy must be subject to the court‟s
jurisdiction;
(5)
The defendant must be a person having a proper or
tangible interest in opposing the plaintiff‟s claim and
(6)
The issue must be ripe, i.e. must not be of academic
interest, hypothetical or one whose resolution would be
of no practical utility.”.
[30]
For the Plaintiff‟s claim to be maintainable, it had the onus to
establish that all the aforesaid conditions had been met by the facts of this
case, failing which the case would not merit a declaratory judgment being
entered in the exercise of the Court‟s discretionary power.
[31]
In the instant case, the Plaintiff had indisputably not exhausted all
alternative statutory and domestic remedies before coming to Court for a
declaratory judgment on the dispute with the Defendant society. In the
circumstances and for the reasons adverted to in the analysis of the issues,
I held that this application for declaratory orders on the issues in dispute
that should have been resolved by alternative remedies under statute was
premature. Hence, I declined to exercise my discretion to make the
declaratory orders sought which, in my view, would contravene the proviso
to section 41, SRA. To conclude, I held that the Plaintiff had not satisfied
the Court that there exist valid and sufficient grounds for the court to
exercise its discretionary powers vested in it under section 41, SRA to
13
make the declarations prayed for. I, accordingly, dismissed this application
with costs of RM4,000.00.
Dated: 11th March 2014
( GUNALAN A/L MUNIANDY )
Judicial Commissioner
High Court of Malaya
Johor Bahru.
For the Plaintiff
:
Mr. K S Pang &
Ms. W C Teo
Messrs K S Pang & Co.
Advocates & Solicitors
Johor Bahru.
For the Defendant
:
Mr. H L Pang
Messrs C C Aiyathurai & Co.
Advocates & Solicitors
Segamat, Johor.
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