1
IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR
(COMMERCIAL DIVISION)
SUIT NO: 22NCC-418-06/2013
LUM MOOI
v.
OOI WING CHUN & 2 ORS.
GROUNDS OF JUDGMENT
Background
The Plaintiff together with the 1st Defendant are directors of a
family owned company incorporated as Belon Ooi Sdn. Bhd. (‘the
company’). The 1st Defendant is the Plaintiff’s eldest son and the
2nd Defendant is the 1st Defendant’s wife. The 3rd Defendant is the
company secretary of the company.
The Plaintiff set up the business with her husband as a partnership
in 1977 supplying balloons. On 27.11.2002, the partnership was
incorporated as a private limited company. The 1st Defendant
started working full time in the company since 1987. Sometime
in 1994 when his father retired, the 1st Defendant took over the
management and operation of the company. Since 1996, the
Plaintiff has not been active in the management and operation
of the company.
2
The Trial
The trial commenced on 21st April 2014 and a total of eight
witnesses were called to give evidence. The Plaintiff called three
witnesses and the 1st and 2nd Defendants called four witnesses. As
for the 3rd Defendant, the 3rd Defendant himself gave evidence.
The Witness
Plaintiff
(i)
Chia Mau Choy
PW1
(ii)
Ooi Chet Hui
PW2
(iii)
Lum Mooi
PW3
1st and 2nd Defendants
(i)
Ooi Wing Chun
DW1
(ii)
Leong Lai Fann
DW2
(iii)
Ooi Lai Hoon
DW3
(iv)
Lim Chin Fei
DW4
3rd Defendant
Kok Beng Hock
DW5
The cause papers referred during the trial proceedings are as
follows:(i)
Bundle of Pleadings;
(ii)
Supplemental Bundle of Pleadings;
(iii)
Common Bundle of Documents;
(iv)
Issues to be tried between Plaintiff and 1st and 2nd
Defendants;
3
(v)
Issues to be tried between Plaintiff and 3rd Defendant; and
(vi)
Agreed Facts.
The Plaintiff’s Claim
1st and 2nd Defendants
(i)
A declaration that the alleged sale and purchase and transfer
of the Plaintiff’s shares in the company for the consideration
sum of RM650,000.00 is null and void.
(ii)
A declaration that the assignment dated 22.1.2011 in favour
of the 1st Defendant in respect of the AIA Insurance Policy
No.S55-4226974 which was taken on 28.7.1992 and matured
on 28.7.2013 is null and void.
3rd Defendant
The 3rd Defendant as the Company Secretary to the Company
rectifies and re-enters the Plaintiff’s name in the Register of
Members of the Company and register of entry and memorial of the
Companies Commission of Malaysia as the registered shareholder
of the entire 400,399 shares in the Company.
Issues to be tried
1st and 2nd Defendants
(a)
whether the alleged Transfer Form 32A and the alleged
Directors’ Circular Resolution both dated 16.8.2012 in respect
of the alleged transfer of the Plaintiff’s entire 400,399 shares
owned by the Plaintiff in the Company in favour of the 1st
Defendant for the consideration sum of RM650,000.00 were
4
without free consent as defined and provided under Section
14 of the Contracts Act 1950 and it is null and void under the
law;
(b)
whether the Plaintiff allegedly sold the entire 400,399 shares
to the 1st Defendant for the sum of RM650,000.00;
(c)
whether the Absolute Assignment dated 22.1.2011 in favour
of the 1st Defendant in respect of AIA Insurance Policy No.
S55-4226974 taken on 28.7.1992 and which matured on
28.7.2013 is null and void and that the 1st Defendant to
refund and pay back to the Plaintiff a sum of RM200,391.69
being the total proceed of the insurance policy; and
(d)
whether
the
Plaintiff
had
allegedly
assigned
all
the
guaranteed payment due and payable under the Insurance
Policy No. S55-4226974 dated 28.7.1992 to the 1st Defendant
vide the Request of Change and Absolute Assignment Form.
3rd Defendant
(a)
whether the Plaintiff had on 16.8.2012, voluntarily agreed
and consented to transfer all her shares to the 1st Defendant
for the sum of RM650,000.00 vide Form 32A – Form of
Transfer of Securities and a Directors’ Circular Resolution in
writing pursuant to Article 90 of the Company’s Article of
Association;
(b)
whether the 3rd Defendant executed the said share transfer
exercise in accordance with the wishes of both the Plaintiff
and the 1st Defendant; and
5
(c)
whether the 3rd Defendant has fully discharged his duty of
care pursuant to the standard of his profession as a company
secretary with due care and diligence.
The Plaintiff’s Submission
It is contended by the Plaintiff that the Plaintiff had disputes with
the 1st and the 2nd Defendants. As a result of these disputes a
meeting was arranged on 26.12.2012 by the 3rd Defendant to
resolve the disputes pertaining to the accounts and operation
of the company. Mr. Chia Mak Choy (PW1), the Plaintiff’s close
friend, was instructed by the Plaintiff to speak on her behalf. Also
present at the meeting was Ooi Chet Hui (PW2), the Plaintiff’s
youngest son. At the meeting the Plaintiff proposed to appoint
three new additional directors to the Company. The main reason
for this proposal was to enable the Plaintiff to verify the status of
the affairs of the company before any discussion and mandate on
the sale and purchase of the shares of the company could take
place. A shareholders’ meeting was scheduled on 21.1.2013 to
discuss the matter further.
It is submitted by the Learned Counsel for the Plaintiff, the 3rd
Defendant did not proceed to arrange the shareholders meeting on
21.1.2013 despite the request made. Letters dated 27.12.2012 and
31.12.2012 addressed to the 3rd Defendant were issued by the
Plaintiff’s authorized representative, PW1. The Plaintiff demanded
that the 3rd Defendant call for an Extraordinary General Meeting
(EGM). It is the Plaintiff’s submission that the Plaintiff had
exercised her rights as a shareholder through PW1. The 3rd
Defendant did not call for the EGM. It is submitted by the Learned
6
Counsel for the Plaintiff that the 3rd Defendant failed to discharge
his duty as the Company Secretary with due care and diligence for
not calling the meeting as requested by her.
The Transfer Form and Directors’ Circular Resolution
It is submitted by the Learned Counsel for the Plaintiff that the
Plaintiff had no knowledge and did not consent to the sale and
purchase of all her entire 400,399 shares in the company to the
1st Defendant for the consideration sum of RM650,000.00. It is
further submitted that the Plaintiff’s signature on the alleged
Transfer Form as well as the Director’s Circular Resolution dated
16.8.2012 were procured without her having any knowledge of
the true contents. She only became aware of the consequences
when it was given by the 3rd Defendant on 22.2.2013. It is further
submitted that the Plaintiff was deceived and misrepresented by
the 2nd Defendant when she signed the documents.
The Learned Counsel for the Plaintiff further submitted that the
alleged sale and purchase as well as the transfer of shares are
void for uncertainty as the consideration sum was never agreed
upon. The Plaintiff had never agreed to sell and transfer her
entire 69.99% shares to the 1st Defendant for the consideration
sum of RM650,000.00.
Absolute Assignment dated 22.1.2011 of the AIA Insurance
Policy No. S55-4226974 in favour of the 1st Defendant
It is contended by the Plaintiff that she did not consent to the
assignment. The Plaintiff had expressly pleaded the statutory
provision of ‘pre consent’ and the three elements available under
7
section 14 of the Contracts Act 1950. The Plaintiff contended that
she was cheated and dishonestly induced by the 1st Defendant
and the 2nd Defendant to assign the Insurance Policy. The Learned
Counsel for the Plaintiff submitted that the relationship between
the Plaintiff and the 2nd Defendant could be described as
Defendant being in a position of dominance over the will of the
Plaintiff.
The 1st and 2nd Defendants’ Submission
The Learned Counsel for the 1st and 2nd Defendants submitted that
the Plaintiff did not dispute the signing of Form 32A, the Resolution
and the Assignment Forms. It is further submitted that pursuant
to section 14 of Contracts Act 1950, a contract can be nullified if
the following elements can be established,
(a)
coercion;
(b)
undue influence;
(c)
fraud;
(d)
misrepresentation; or
(e)
mistake.
It is submitted that the Plaintiff did not plead in her Statement of
Claim under which of the elements she is relying to nullify the
said Form 32A, the Resolution and the Assignment. She had
merely pleaded in her Statement of Claim that she had signed the
documents and did not know of the contents. It is further submitted
by the Learned Counsel for the 1st and 2nd Defendants that the
Plaintiff could not rely on any of the five elements to nullify the
8
document as the Plaintiff had failed to plead the particulars of
the said elements.
The Plaintiff also failed to lead any evidence on the alleged fraud,
misrepresentation, coercion, undue influence and mistake at the
full trial. The Plaintiff had in fact given evidence admitting signing
all the documents. It is the contention of the 1st and 2nd Defendants
that the Plaintiff had signed the documents without any coercion,
undue influence, fraud, misrepresentation or mistake.
The 3rd Defendants Submission
In the Statement of Claim, the Plaintiff had alleged that the 3rd
Defendant had conspired against or unduly influenced, defrauded
or misrepresented to the Plaintiff of the transfer of the Plaintiff’s
400,399 shares to the 1st Defendant. It is submitted by Learned
Counsel for the 3rd Defendant that the burden of proof is on the
Plaintiff. The Plaintiff has failed to prove that there was collusion.
The Plaintiff has not pleaded or shown any facts or particulars
proving that the 1st Defendant and 3rd Defendant has colluded
and conspired to injure the Plaintiff. The standard of proof required
to prove fraud, fraudulent misrepresentation is beyond reasonable
doubt.
It is further submitted that there is no evidence that:
(i)
there was an agreement between the 1st Defendant and/
or the 2nd Defendant and the 3rd Defendant to defraud the
Plaintiff;
9
(ii)
there was an agreement between the 1st Defendant and/or
the 2nd Defendant and the 3rd Defendant to injure or cause
damage to the Plaintiff;
(iii)
the acts of the 3rd Defendant was done in execution of that
agreement which resulted in damage to the Plaintiff;
(iv)
the Plaintiff suffered damage as a result thereof;
(v)
the 3rd Defendant misrepresented any facts to the Plaintiff in
the matter of the share transfer exercise;
(vi)
the 3rd Defendant had exerted undue influence on the Plaintiff
and it would have required very strong evidence to prove this
fact as the 3rd Defendant, being a servant of the Company,
was clearly not in the position to influence the Plaintiff and
had taken instructions as he usually did in the usual course of
business from the Company; and
(vii) the 3rd Defendant had acted dishonestly in anyway.
Evaluation of Evidence
Whether the Transfer Form 32A and the alleged Directors’ Circular
Resolution both dated 16.8.2012 in respect of the alleged transfer
of the Plaintiff’s entire 400,399 shares owned by the Plaintiff in
the Company in favour of the 1st Defendant for the consideration
sum of RM650,000.00 were without free consent as defined and
provided under Section 14 of the Contract Act 1950 and it is null
and void under the law
In her Statement of Claim the Plaintiff pleaded as follows,
10
“12. Pihak Plaintiff berasa amat hairan perkara jual dan beli sahamsaham tersebut di atas dan mendapati bahawa beliau telah ditipu
dan didorong dengan curangnya oleh pihak Defendan Pertama
bersama dengan perbuatan Defendan Ketiga….”
“17.
Pada segala masa material tersebut, pihak Defendan-Defendan
Pertama, Kedua dan Ketiga telah bersama dan/atau berasingan
mengemukakan dokumen-dokumen berkaitan dengan Syarikat
tersebut
dan
yang
lain
kepada
pihak
Plaintif
untuk
ditandatangani tanpa penjelasan yang terperinci dan dengan
memadainya mengenai isi kandungan, khususnya mereka
mengetahui bahawa pihak Plaintif tidak memahami Bahasa
Inggeris dan Bahasa Malaysia; di mana pihak Plaintif telah
dipengaruhi dan dipercayakan oleh pihak Defendan Pertama
merupakan anak kepada pihak Plaintif, pihak Defendan Kedua
merupakan menantu kepada pihak Plaintif dan pihak Defendan
Ketiga merupakan Setiausaha kepada Syarikat tersebut.”.
18.
Memandangkan perbuatan-perbuatan yang dilakukan dan/atau
disebabkan oleh pihak-pihak Defendan-Defendan terhadap
pihak Plaintif tanpa persetujuan bebas, antara lain, termasuk
pengaruh tak wajar, tipu, salah nyata, maka pihak Plaintif
dikehendaki secara diri dan menanggung fee peguamcara, kos
dan perbelanjaan untuk menuntut kembali hak dan kepentingan
kesemua 400,399 saham-saham yang dipunyai oleh pihak
Plaintif di dalam Syarikat tersebut dan untuk memohon perintah
bagi penahanan, penjagaan atau pemeliharaan hasil wang di
dalam Polisi Insuran AIA No. S55-4226974 bertarikh 28.7.2092
yang akan matang dan dibayar itu merupakan dan menjadikan
hal perkara kausa atau perkara itu, dengan demikian pihak
Plaintif
telah
mengalami
kerugian
dan
gantirugi
akibat
perbuatan-perbuatan yang dilakukan oleh pihak DefendanDefendan.”.
11
The Plaintiff (PW3) gave evidence through her Witness Statement
(WS) that she was cheated and induced by the 1st Defendant
together with the 3rd Defendant “.…causing the alleged sale and
purchase of all my shares in the Company in favour of the First
Defendant and also the assignment of the AIA Insurance Policy…”.
She went on further to state that it was “…without my free consent,
mainly, undue influence, fraud, misrepresentation…”.
The Plaintiff sought to plead the elements as provided under
section 14 of the Contracts Act 1950. Section 14 of the said Act
reads as follows:
“ Consent is said to be free when it is not caused by:
(a)
coercion, as defined in section 15;
(b)
undue influence, as defined in section 16;
(c)
fraud, as defined in section 17;
(d)
misrepresentation, as defined in section 18; or
(e)
mistake, subject to sections 21, 22 and 23.
Consent is said to be so caused when it would not have been given
but for the existence of such coercion, undue influence, fraud,
misrepresentation, or mistake.”.
This Court observed that in the Statement of Claim, the Plaintiff
failed to particularize the manner and circumstances of the
purported coercion by the 1st and 2nd Defendants. The Plaintiff
also failed to state with clarity the manner or circumstances the
Plaintiff was unduly influenced or in which way the fraud was
perpetrated by the 1st and 2nd Defendants to procure the transfer
of shares, the relevant facts or statement that was misrepresented
to the Plaintiff, the sum of which resulted in the Plaintiff affixing
12
her signature on the documents. The Pleadings of the Plaintiff,
unfortunately is devoid of all these material facts to support her
allegation of coercion, undue influence, misrepresentation and
fraud. The purpose of pleadings is to advocate the Plaintiff’s cause
of action and to enable the other party to know the precise case
that he has to defend. Therefore, it is necessary to plead material
facts as sufficiently as possible as the parties cannot adduce
evidence in support of unpleaded facts at trial (Refer to Asia Hotel
Sdn. Bhd. v. Malayan Insurance (M) Sdn. Bhd. [1992] 2MLJ 615).
In the Court of Appeal case of Ambank (M) Bhd v. Abdul Aziz
Hassan & Ors [2010] 7 CLJ 663, it was said at p. 671 that,
“ …pleadings operate to define and delimit with clarity and precision
the real matters in controversy between the parties so that their
respective cases can be prepared with ease and the court too can
expeditiously adjudicate them. No litigant should be taken by surprise
or be led astray due to faulty pleadings.”.
In Tan Ah Tong v. Parveen Kaur [2011] 5 MLJ 428 the Court of
Appeal explained,
“ In order to prove any of the elements above, it must first be
specifically pleaded by the defendant in his statement of defence as
required under O 18 r 8 and r 12 of the Rules of the High Court
1980. Failure to specifically plead any of those elements is fatal to
the defendant’s case. In the present case, the defendant has failed
to specifically plead any of those elements, in his statement of
defence. Therefore, the defendant cannot in law rely on any of those
defences.”.
13
The Court of Appeal in the case of Projek Lebuh Raya Utara Selatan Sdn. Bhd. v. Kim Seng Enterprise (Kedah) Sdn.
Bhd. [2013] 5 MLJ 360; [2013] 6 CLJ 958 held that,
“ …the court is not entitled and should not decide a suit on an issue
which is not pleaded. In short, the trial of the suit must be confined to
the pleadings (Yew Wan Leong v. Lai Kok Chye [1990] 2 MLJ
152 (SC), at p 154) and the pleadings operate to effectively define
and delimit with absolute clarity and precision the real matters in
controversy between the parties. In this way, the parties could
prepare their respective cases and the court too will adjudicate on
those issues and no more…”.
During her cross-examination, the Plaintiff admitted signing the
documents on her own free-will and that she had signed all
the documents that she was asked to sign as she trusted her
daughter-in-law,
“ Q: Do you agree that Leong Lai Fann explained to you the contents.
A:
No, she never explained.
Q:
So you just signed
A:
Yes.
Q:
You trusted her
A:
Yes.”.
In her Witness Statement, the Plaintiff had stated as follows,
“ ...I have been signing the documents of the company and others
without detailed and adequate explanation in respect of the contents
as produced by the 1st Defendant, my son, 2nd Defendant, my
daughter-in-law and Mr Kok, the Company Secretary as I trusted
them.”.
(Re: Q/A 27)
14
From the evidence, the Plaintiff has been signing all the
Company’s documents for the past 20 years. No evidence was
adduced that the Plaintiff was coerced or forced to sign the
Transfer Form. It is trite law that a party who had executed a
document is bound by the terms of the said document that he
had sign unless if he could show that the Agreement was tainted
with fraud, misrepresentation or undue influence. Visu Sinnadurai,
J in the case of Polygram Records Sdn. Bhd. v. The Search &
Anor [1994] 3 CLJ 806 held that a party who had executed a
written contract is bound by the four corners of the written contract
that he had signed unless if it could be established that the
contract was tainted with fraud, misrepresentation and undue
influence. Even in a situation that the party who had signed the
contract has not read the contents of the contract, he is still bound
by the terms of the contract. This principle had been established
and accepted by the Court as early 1934 through the decision of
Scrutton L.J in L’Estrange v. F Groucob, Ltd [1934] 2 K.B. 394
where His Lordship held:
“ When a document containing contractual terms is signed, then, in the
absence of fraud, or I will add, misrepresentation, the party signing
it is bound, and it is wholly immaterial whether he has read the
document or not.”.
Justice Asmabi Mohamad in the case of CIMB Islamic Bank
Berhad v. LCL Corporation & Anor referred to the case of Pao
On v. Lau Yin Long [1979] 3 AER 65 where it was held that in
order for the Court to ascertain if the contract was entered into
voluntarily and/or whether there was presence of duress and/or
coercion, the following circumstances must be examined:
15
(a)
Whether there was true consent;
(b)
To inquire if the contracting party was coerced into
making the contract;
(c)
Whether the said party protested;
(d)
Whether the party had an alternative course opened to
him-adequate legal remedy; and
(e)
Whether an independent advice was sought.
DW1 told the Court that it was his mother’s wish to transfer the
shares to him. DW3 (DW1’s sister) gave evidence that the Plaintiff
had the intention to transfer the shares to DW1,
“ Q4: Do you know anything about the Plaintiff’s transfer of shares
in the Company and assignment of the Policy to the 1st
Defendant?
A:
Not really but I used to meet my mother 3 to 4 times a week,
and she would update me about her well being. In some of
the gathering, I realized that she intended to transfer her
company shares to my brother, Ooi Wing Chun and that she
wanted to sort out all the family assets for those who
deserve it…”.
DW2 in her Witness Statement explained that when she gave
the documents to the Plaintiff to be signed, she had informed the
Plaintiff that the documents were to transfer the shares,
“ I told her that the documents were to transfer the shares in the
Company to my husband as she has instructed the Company
Secretary to prepare. She understood what I told her, put on her
16
reading glasses and signed the Form 32A and the Resolution, I
signed next to her signature on the Form 32A as a witness.”.
DW2 during cross-examination further testified that the Plaintiff
knew the purpose of the documents she was signing,
“ I did asked the Plaintiff but when I handed the forms and Resolution,
she knew what documents that she was signing for.”.
In her Witness Statement she was asked whether the Plaintiff
informed her the reason she wanted to transfer her shares in the
Company to the 1st Defendant. DW2 explained as follows,
“….sometime in August 2012, my mother-in-law told me she wanted to
prepare a will, and asked me to arrange a meeting with the Company
Secretary. I did, and I believe they met. Subsequently, the Company
Secretary passed me the Form 32A and the Resolution and asked
me to get my mother-in-law to sign it. He told me that the documents
are for transfer of my mother-in-law’s shares in the Company to my
husband, as instructed by mother. Then I only know.”.
The Plaintiff, however, gave evidence that she only found out
about the transfer of shares on 22.2.2013 when she was told by
the 3rd Defendant. However, the evidence shows that the Plaintiff
had signed the transfer on her own free will as she did not raise
any objections or protested when the forms were given to her to be
signed by her daughter-in-law. Neither did she query or question
when she was asked to sign.
In Pengiran Othman Shah bin Pengiran Mohd Yusof & Anor v.
Karambunai Resorts Sdn. Bhd. (formerly known as Lipkland
(Sabah) Sdn. Bhd.) & Ors [1996] 1 MLJ 309), the Court of Appeal
17
followed the principles expressed by Lindley LJ in Allcard v.
Skninner. In that case, the Appellants inherited substantial tracts
of land in Karambunai, Sabah. They contended that they had been
unduly influenced to part with the main bulk of their land on the
grounds that they had no independent legal advice when they
executed the various documents and also they were placed in an
unequal bargaining power. The Court of Appeal found that the
Appellants had executed the documents freely and without protest.
Similarly in the instant case, the Plaintiff had signed the Transfer
Forms freely and without any form of protest or objection. She is
therefore bound by the terms of the transfer of shares.
The Plaintiff failed to state in her Statement of Claim with precise
clarity the material facts of her allegation of coercion, undue
influence, fraud, misrepresentation, or mistake. Throughout the
proceedings before this Court, no evidence was adduced by the
Plaintiff that there was fraud, undue influence, misrepresentation
involved which led to her signing the Transfer Form for the
transfer of shares. No evidence was adduced by the Plaintiff to
even suggest that there was misrepresentation by either the 1st
Defendant and/or the 2nd Defendant. PW1 and PW2 merely gave
evidence with regards to the meeting. PW1 and PW2 did not
offer any evidence supporting the allegation of coercion, undue
influenced, misrepresented or fraud. The totality of the evidence
overwhelmingly shows that the Plaintiff was not in any way
coerced, unduly influenced, misrepresented by the 1st and 2nd
Defendants into signing the Transfer Form.
18
In the Plaintiff’s Pleadings there are only general allegations of
fraud. It is trite where an allegation of fraud is raised which involves
element of dishonesty, the standard of proof to be applied is
on beyond reasonable doubt basis and not on a balance of
probabilities.
The Plaintiff had alleged fraud on the part of the 1st and 2nd
Defendants. A fraudulent act in a civil case carries a higher degree
of proof which is beyond reasonable doubt. Having said that the
Plaintiff hardly offered any evidence to establish even a probable
cause for fraud and thus would seemingly fail to satisfy the
standard required to prove an act of fraud.
The Value of the Shares
On 31.12.2012, the Plaintiff had agreed for the shares to be
valued by the Inland Revenue Board (IRB). The valuation was
duly done by IRB on 1.3.2013 and the sum of RM650,000.00
was fixed. The shares were then valued by IRB at the Net
Tangible Asset (NTA) value of RM649,363.18. Subsequently, the
valuation of the shares by IRB was agreed and accepted by
the Plaintiff herself and that the payment of the purchase price
would be by way of installments. Only after that agreement
was reached, the Form 32A was then executed and submitted.
The Plaintiff never challenged this. Furthermore, DW1 was never
cross-examined on this issue by the Learned Counsel for the
Plaintiff.
19
Whether the Absolute Assignment dated 22.1.2011 in favour
of the 1st Defendant in respect of AIA Insurance Policy No.S554226974 taken in 28.7.1992 and which matured in 28.7.2013
is null and void
On 6.7.1992, the Plaintiff had applied for the Policy and had
named all her children as beneficiaries with equal shares. On
28.7.1992, AIA issued the Policy to her and sometime end of
2010 the Plaintiff decided to assign the Policy to the 1st Defendant.
The Plaintiff herself corrected the particulars of the beneficiary
and nominated the 1st Defendant for the Policy. She had signed
the Correction Form as well as the Nomination Form dated
28.10.2010. The beneficiaries had all signed the Revocation Form
dated 10.12.2010. Subsequently she signed the Request for
Change Form and Absolute Assignment Form dated 22.1.2011
and assigned and transferred the full benefits of all monies to
the 1st Defendant. DW4, the insurance agent gave evidence that
the Plaintiff is in fact aware of the assignment. The Plaintiff had
informed DW4 of her intention to assign the Policy to the 1st
Defendant. She further testified that when she met the Plaintiff
sometime in 2012 to discuss her policies with AIA, DW4 had
updated and explained to Plaintiff in Cantonese the status of her
policy including the assigned Policy.
DW4, the insurance agent, gave evidence that she has been taking
care of the family insurance matters since 2007. She explained in
her Witness Statement that the said Policy in dispute was sold to
the Plaintiff by another agent by the name of Goh Siew Luan. She
took over in 2007 and since then she received payments for the
monthly premiums from the 1st and 2nd Defendants.
20
She also confirmed that the Plaintiff had signed all the documents
pertaining to the assignment. In her Witness Statement she had
also stated that she met the Plaintiff sometime in 2012 to discuss
the policies with AIA. The Plaintiff had asked DW4 to explain the
assignment she had assigned in 2010. DW4 had explained to the
Plaintiff in Cantonese that the matured funds would eventually
go to the Company. She also gave evidence that the Plaintiff
did not mention she was deceived by the 1st Defendant or the
2nd Defendant into signing the assignment form or that she did
not know what she had signed.
DW2 in her Witness Statement had stated that the Plaintiff
herself had asked her to contact the insurance agent to prepare
the documents for her to assign the Policy to the 1st Defendant
(Re: Q/A12),
“Q12: What was your involvement regarding the Policy?
A:
In/around October 2010, my mother-in-law told me to contact
Esther Lim (“Esther”), our AIA insurance agent, to prepare
documents for her to assign the said Policy to my husband. She
told me that once matured, the money would be given to the
Company.”.
DW3 had also signed the assignment form of the said Policy and
she said that she had signed the form as it was her mother’s wish
to assign the policy to her brother, DW1. She did not object to the
assignment even though she was one of the beneficiaries under
the said Policy.
21
The evidence of DW2 and DW3 are clear and uncontroverted,
namely that the Plaintiff had consented with any element of duress,
undue influence, fraud and/or misrepresentation to assign the
said Policy.
This Court find DW4 to be a credible witness as her testimony
was coherent and unbiased. Despite rigorous cross-examination,
DW4 remained steadfast and unwavered. DW 4’s testimony is the
last piece of a jigsaw puzzle providing a complete picture of the
true events that took place with regards to the assignment of
the Policy.
Therefore, based on the evidence adduced there was no evidence
of coercion or force when the Plaintiff assigned all the guaranteed
payment due and payable under the Insurance Policy No. S554226974 dated 28.7.1992 to the 1st Defendant vide the Request
of Change and Absolute Assignment Form and for the proceeds
of the matured funds to benefit the Company.
The meeting on 26.12.2012
The Plaintiff had proposed the appointment of new directors at
the meeting held on 26.12.2012. On 31.12.2013, the Plaintiff had
agreed with the 1st Defendant for the shares to be valued by the
IRB and for the sale consideration to be based on the valuation.
With the completion of the share transfer, the meeting on
21.1.2013 was no longer necessary. PW1 in his Witness Statement
stated that he had attended a meeting on 26.12.2012 with the
Company Secretary (3rd Defendant) to discuss the affairs of the
company. Present at the meeting was the Plaintiff and her two
22
sons, the 1st Defendant and PW2. PW1 was representing the
Plaintiff and spoke on her behalf at the meeting. The Plaintiff
wanted to appoint additional directors and also signatory of the
company bank accounts. The 1st Defendant gave evidence that
the purpose of the meeting was to discuss the internal affairs
and management of the Company. However the Plaintiff brought
along with her PW1 and PW2. The Company Secretary did not
receive any letter of authorisation for PW1 and PW2 to attend to
speak on behalf of the Plaintiff at the meeting. The 1st Defendant
however, did not accept the proposal and instead proposed to
buy the shares. As they could not agree, the parties then decided
to hold a shareholders’ meeting. The meeting was rescheduled
on 21.1.2013.
The 3rd Defendant was to prepare all the necessary notices
and documents. Subsequently, on 31.12.2012 the Plaintiff and
the 1st Defendant agreed that the shares be valued by the IRB
and that the sale consideration for the transfer would be based
on the IRB valuation. The 1st Defendant then made payments
of RM220,000.00 to the Plaintiff. As the parties have agreed on
the price of the shares, the meeting was no longer considered
necessary. The Company Secretary of the company decided not
convene the EGM as the matter was considered settled and
furthermore the Plaintiff was no longer a shareholder of the
Company at that point of time. Given that the dispute with regard
valuation of shares have been settled, the 3rd Defendant was
correct for not calling the meeting on 21.1.2013.
23
The 3rd Defendant
The Plaintiff has not pleaded or shown any facts or particulars
that the 1st Defendant and the 3rd Defendant had colluded and
conspired. In the tortious act of conspiracy, there must be an
agreement or combination of two or more with the common
intention to effect an unlawful purpose or to do a lawful act by
unlawful means which will result in damages to the Plaintiff.
Mohamed Dzaiddin J (as he then was) in Yap J.H. v. Tan Sri
Loh Boon Siew & Ors. [1991] 4 CLJ (Rep) 243; [1991] 3
CLJ 2960 referred to the case of Lonrho Plc v. Fayed and
Others [1991] 3 All ER 303 where House of Lords affirmed that
there are two types of conspiracies:
“... (a) A and B combine to do a lawful act for an unlawful purpose
which causes loss to a third party, C; and
(a)A and B combine to do an unlawful act which causes loss to C..”.
Applying the above principles where the act is lawful, the
predominant purpose must be to cause loss to the Plaintiff for
there to be conspiracy. If the predominant purpose is for the self
interest or protection of the Defendants, it is not an unlawful
purpose and there is no conspiracy, even if the Plaintiff incidentally
suffers loss.
In Rookes v. Barnard [1964] 1 All ER 367 at 297 Lord Devlin
said:
“ There are, as is well known, two sorts of conspiracies, the Quinn v.
Leathern ([1901] AC 495...) type which employs only lawful means
but aims at an unlawful end, and the type which employs unlawful
means.”.
24
In Crofter Hand Woven Harris Tweed Co Ltd v. Veitch [1942]
AC 435 at 445 Viscount Simon LC said:
“ It is enough to say that if there is more than one purpose actuating a
combination, liability must depend on ascertaining the predominant
purpose. If the predominant purpose is to damage another person
and damages results, that is tortious conspiracy. If the predominant
purpose is the lawful protection or promotion of any lawful interest of
the combiners (no illegal means being employed), it is not a tortuous
conspiracy, even though it cause damage.”.
For conspiracy to take place, there must be an unlawful object,
or, if not in itself unlawful, it must be brought about by unlawful
means. There must also be co-existence of an agreement with
an overt act causing damage to the Plaintiffs. Hence, this tortious
act is complete only if the agreement is carried into effect, thereby
causing damage to the Plaintiff. Therefore in order to succeed
in a claim based on the tort of conspiracy, the Plaintiff must
establish:
(i)
an agreement between two or more persons;
(ii)
for the purpose of injuring the Plaintiff; and
(iii)
the execution of that agreement resulted in damages to
the Plaintiff.
As enunciated in the cases mentioned above, there must be
evidence of an agreement to cause damage. For this purpose, a
close look at the evidence tendered to determine the intention of
the parties is required. However, the Court must thoroughly sieve
the facts to ensure that those facts satisfy the principles laid
25
out above. In the instant case, the Plaintiff has failed to provide
any evidence at all that there was an agreement between the
1st Defendant and the 2nd Defendant together with the 3rd
Defendant to injure or cause damage to the Plaintiff. The questions
before this Court then are as follows,
Was there any evidence to show that,
(i)
there was an agreement between the 1st Defendant
and/or the 2nd Defendant together with the 3rd
Defendant to defraud the Plaintiff?
(ii)
there was an agreement between the 1st Defendant
and/or the 2nd Defendant and the 3rd Defendant to
injure or cause damage to the Plaintiff?
(iii)
that the acts of the 3rd Defendant resulted in damage
to the Plaintiff?
(iv)
the 3rd Defendant had misrepresented any facts to the
Plaintiff in the matter of the share transfer exercise?
(v)
the 3rd Defendant had exerted undue influence on the
Plaintiff?
This Court finds that there were no evidence adduced by the
Plaintiff that the 3rd Defendant had conspired with the 1st and
2nd Defendants. As such the answers to the above questions
would all be in the negative.
26
The Good Governance Guides No. 2.1 on Roles and Duties of
the Company Secretary issued by MAICSA states that the
company secretary should adhere to “The Company Secretary’s
Code of Ethics developed by the Companies Commission of
Malaysia”. Paragraph D(1) and (2) of the Code of Ethics provides
that:
“ In the performance of his duties, a company secretary should always
observe the following codes:
1. Strive for professional competency and at all times exhibit a
high degree of skill and proficiency in the performance of the
duties of his office.
2. At all times, exercise the utmost good faith and act both
responsibly and honestly with reasonable care and due diligence
in the discharge of the duties of his office.”.
The instructions not to call for the meeting came from the
director, the 1st Defendant. The 3rd Defendant need not comply with
any instruction of a person who is not a director nor a shareholder
of the Company. From the factual matrix of the case this Court is
satisfied that the 3rd Defendant had acted upon instructions of
his client and had discharged his duty diligently as a Company
Secretary of the company.
Conclusion
In coming to a decision in this case, the Court has carefully
weighed the evidence adduced by all parties, scrutinised the
documents tendered and relied on by the parties as well as
considered the written submissions filed by them. On considering
the evidence as a whole especially the evidence of all the Plaintiff’s
27
witnesses vis-a-vis the pleadings, and that of the 1st, 2nd and 3rd
Defendants, I am of the considered view that the Plaintiff has
failed to establish her case on a balance of probabilities against
the Defendants. Accordingly based on the reasons mentioned
above, this Court dismissed the Plaintiff’s claims against the
Defendants with costs. After submission by Counsels on costs I
awarded costs of RM30,000.00 for the 1st Defendant and the
2nd Defendant, and RM10,000.00 for the 3rd Defendant to be
paid by the Plaintiff.
sgd.
( HASNAH BINTI DATO’ MOHAMMED HASHIM )
Judge
High Court of Malaya
Kuala Lumpur.
11th November 2014
28
Counsels:
For the Plaintiff/Appellant:
Messrs. Tunku Amiruddin & K.K. Chew
- Tengku Hishamudin
- A. Ramanathan
For the Defendant/ Respondent:
Messrs. Shearn Delamore & Co. for the 1st & 2nd Respondent.
- Chai Siew Wan
- S.Y. Liew
- Amanda Moh
Messrs. Azim, Tunku Farik & Wong for the 3rd Respondent.
- Lee AI Vi
- John Wong