Lai King Lung & Anor v Merais Sdn Bhd [2020] 6 AMR 217 FC
[Wound up company – retrospective santion]

Justin was the co-counsel for the Appellants assisting Datuk Seri Gopal Sri Ram (Senior Counsel). The Federal Court clarified the earlier Federal Court case of Winstech Engineering Sdn Bhd v ESPL (M) Sdn Bhd [2014] 1 AMR 797 and inter alia held that the Official Receiver/Liquidator had no power to grant retrospective sanction.

The following Question of Law was answered in the negative :

"Whether retrospective sanction from the Official Receiver/Liquidator of a wound-up Appellant/ Applicant in Court by itself can sufficiently clothe the Appellant and/or their solicitors with locus standi to proceed with the Appeal/proceeding in question without leave nunc pro tunc obtained from the Court?"

The Federal Court further ruled and/or provided guidance as follows in respect of the options available to a litigant if they could not obtain sanction and/or could not obtain sanction in time i.e.

(i) First, the plaintiff could make an urgent application to the Court of Appeal for extension of time to file the notice of appeal where an extension of time would in the normal course have been granted on proof of sufficient grounds

(ii) Secondly, if the sanction was given by the liquidator subsequent to the filing of the notice of appeal, the plaintiff could have made a formal application to the Court of Appeal for leave nunc pro tunc so as to regularise the sanction by giving it retrospective effect.

(iii) Thirdly, if the liquidator refused to give his sanction, then the proper authority is the court. The plaintiff could have applied to the court under s 236(3) of the 1965 Act for the sanction, which sanction can be given retrospectively under the inherent discretion of the court.

In the present case, the plaintiff did not have the locus standi when it filed the notice of appeal. The sanction given by the liquidator did not have retrospective effect. The liquidator did not have the statutory power to grant retrospective sanction in the absence of any express enabling provision in the enactment. Consequently, the Federal Court held that the notice of appeal filed by the plaintiff is bad in law and of no legal effect.


Chin Jhin Thien & Anor v Chin Huat Yean @ Chin Chun Yean & Anor [2020] 5 AMR 541 FC
[Secret Trust]

This is the very first Federal Court decision on secret trust, a novel point of law argued by Justin and Chooi Peng who acted for the Defendants / Respondents. This case confirms that the law and principles of secret trust are part of the jurisprudence of Malaysian law and it applies where appropriate to ensure that the true intentions of the testator where there is a Will are carried out.

This case is an appeal by the Plaintiffs against the Court of Appeal decision, in their attempt to revoke the Grant of Probate issued to the Defendants. The Plaintiffs sought to argue that the deceased did not have the testamentary capacity to make the Will or there was undue influence exerted on the deceased by the Defendants. The deceased's Will named the Defendants as the executors and beneficiaries. The Defendants resisted the Plaintiffs' claim and in their Defence, pleaded that they are not the true beneficiaries of the deceased's estate because of a secret trust created by the deceased.

The Federal Court dismissed the Plaintiffs' appeal, maintained the Court of Appeal decision and answered the Leave Questions as follows :

(i) Whether the concept of secret trust is applicable to Malaysia as there is no decision regarding the applicability of secret trust? Affirmative

(ii) Whether secret trust is applicable in a case involving the issue of testamentary capacity of a testator? Need not be answered but if must be answered, it would be in the Affirmative

(iii) Whether secret trust is contradictory to the Malaysian Wills Act 1959 and/or is against public policy as it can be abused? Negative

The Federal Court also amongst others held that :

(a) Secret trusts enable a testator to direct the disposition of his or her property upon his or her death without specifying the actual beneficiary in the will whereby the property is bequeathed to a 'legatee' who holds it as a trustee for the secret beneficiary.

(b) The concept of secret trust, which is part of the law of trust and is governed by the rules of equity and the common law of England, is statutorily applicable in Malaysia by virtue of Section 3 (1) of the Civil Law Act 1956.

(c) Secret trust operates outside the will, ie. dehors the will. Therefore, the Court's endorsement of the secret trust does not breach the Wills Act or any other statutory law.

(d) If the testator is ill, it does not deprive his ability or capacity to execute a will.


Tindak Murni Sdn Bhd v Juang Setia Sdn Bhd [2020] 2 AMR 387 FC
[Judgment in Default – Right to enforce Arbitration Agreement]

Justin was the counsel for the Appellant in this Appeal which was allowed by the Federal Court. The Federal Court decided on important principles of law relating to the right to set aside a Judgment in Default based on a valid Arbitration Clause. The following Questions of Law were inter-alia answered by the Federal Court :

1. Can a Judgment in Default in Court be sustained when the plaintiff who obtained the Judgment in Default is bound by a valid Arbitration Agreement/Clause and the defendant has raised disputes to be ventilated via Arbitration pursuant to the Arbitration Clause?
We answer the question in the negative.

2. Should the Court in hearing an application to set aside the Judgment in Default where a valid Arbitration Clause is binding on parties consider the “merits” or “existence” of the disputes raised by the defendant?
We answer the question in the negative.

The Federal Court further held as follows in respect of important points of law :

(i) That even when a judgment in default has been procured, Section 10 of the Arbitration Act remains applicable (paragraph 48 (i) of the Grounds)

(ii) The judgment in default cannot act as a bar to arbitration because the Contractor in initiating Court proceedings has effectively breached the arbitration agreement ( paragraph 48(ii) of the Grounds)

(iii) The Employer’s application to stay the Court proceedings pending arbitration raises a jurisdictional point which the Court is bound to consider( paragraph 48 (iv) of the Grounds)

(iv) Clause 30.3(ii) of the PAM Contract entitles the Employer to refer any disputes or differences in relation to the set offs our counterclaim or any allegations of defective work to an arbitrator under Clause 34 of the PAM Contract and therefore , the right to payment under Interim Certificates under Clauses 30.2 or Clause 30.3.(i) are not “carved out” from arbitration ( paragraph 53 ( b) of the Grounds.)


Syarikat Logistik Petikemas Sdn Bhd v Maruzen SH Logistics Sdn Bhd [2020] 7 AMR 408
[Striking out – No cause of action for ‘negligence’ in respect of alleged failure to enter contract]

This is an important case argued by Justin for the Defendant to strike out the Plaintiff’s claim. The Plaintiff (Syarikat Logistik Petikemas Sdn Bhd) filed a suit against the Defendant (Maruzen SH Logistics Sdn Bhd) for negligence in failing to enter into a contract with them. This is an important case because if the Plaintiff’s claim is allowed, it may open a floodgate that an alleged failure to enter into a Contract would lead to a Suit for negligence. The Court struck out the Plaintiff’s claim.

The Plaintiff’s claim against the Defendant was based on, amongst others, failing to enter into a contract with the Plaintiff to rent the relevant premises from the Plaintiff, and the alleged:-

a) Negligent misrepresentation; and/or

b) Breach of duty of care towards the Plaintiff under the purported business relationship between both parties.

The Court inter alia held that :

(i) Since there was negligent misrepresentation alleged on the part of the Defendant, what is vital to establish at this juncture is an underlying relationship between parties, where one party relies on the other and where one is in a dominant position which requires some fiduciary relationship. This is in line with the principle in Hedley Byrne & Co Ltd v Heller & Partners [1964] AC 465 (“Hedley Byrne”)

(ii) Furthermore even if there was a business relationship between the parties, that by itself did not give rise to a fiduciary relationship, such as between a solicitor and client or any kind of relationship of proximity between the plaintiff and the defendant.

(iii) It was not pleaded with precision or clarity, any ‘special relationship’ or ‘skills’ on the part of the Defendant to justify a professional duty of care to the Plaintiff.

(iv) The ‘misrepresentation’ alleged by the Plaintiff is that the Defendant had intended to purchase and/or rent the relevant premises. This did not amount to a misrepresentation, but an expression of the Defendant’s intention that preceded the negotiations that followed.

(v) It is trite that it is not sufficient to plead the legal consequences without setting out in the pleadings the facts which give rise to that claim, or which impose on the defendant the particular duty or liability.


Mammoth Empire Construction Sdn Bhd v Kenwise Sdn Bhd [2020] 2 AMR 683
[Fortuna Injunction – pending Section 37 and/or Section 42 Arbitration Act 2005 application]

Justin acted for the plaintiff to apply for an ad interim Fortuna Injunction to restrain the defendant from proceeding or acting upon the statutory notice and proceeding with a winding-up petition against the plaintiff.

This decision further clarifies the position of the law on Fortuna Injunctions and is helpful for litigants as a winding up threatened to be filed based on an award challenged and/or not registered as a Court Judgment yet arise often in Courts.

(i) The Court held that the case of Mobikom Sdn Bhd v Inmiss Communications Sdn Bhd [2007] 3 MLJ 318 which is a pre-Arbitration Act 2005 case is still applicable to injunct a winding up proceedings when there is a pending Sections 37 and/or 42 Arbitration Act 2005 application to challenge the Arbitration Award plus the recognition and enforcement application by the Defendant.

(ii) Despite the Final Award, the Plaintiff had been disputing the alleged debt both on liability and quantum right from the stage the dispute was referred to arbitration. It would be premature and improper for the Winding Up Petition to be presented at this stage before the pending actions are disposed of.

The argument by the Defendant that unlike Section 17 of the old Arbitration Act 1952 (relied by Mobikom’s case), the wordings of the new Section 36 of the Arbitration Act 2005 grants sufficient power to the party to rely on the Award to initiate Court proceeding is plainly misconceived as there is effect hardly any significant difference in the wording of the finality clause in both sections, except for different usage of words which for all intents and purposes convey the same meaning.


Apex Equity Holdings Berhad & Anor v Lim Siew Kim & 17 Ors [2020] 2 AMR 669
[Locus standi - "persons acting in concert" under Section 360 CMSA 2007]

This case involves the issue of the strict compliance of the Capital Market and Services Act 2007 where the Plaintiffs alleges that the Defendants are "persons acting in concert" and a Suit was filed to seek Injunctive remedies against the Defendants. Justin acted for the 12th and 13th Defendants. All the Defendants applied to strike out the Suit which was allowed by the Court.

The important points of laws canvassed by Yang Arif Ong Chee Kwan includes the following :

1. Sections 218(1) to (3) of the CMSA and s. 60(7), 64(1), 64(1)(h)(iv) and (v) and s.72(2)(a)(i) of the CMSA and / or Rule 4.02(8) and 4.02(9) of the Licensing Handbook SC-GL/2007 (R6-2018)T. 218 are clearly not a "relevant requirement" for the purposes of Section 360 of the CMSA.

2. The Plaintiffs do not have locus standi and neither can they be a "person aggrieved" when :

(i) The Plaintiffs, as the target companies, are the very subject matter of this case; and

(ii) It is the minority shareholders in this case, if at all, who are affected by the acts of 'persons acting in concert' who can sue and not the Plaintiffs.

3. This case involves the rights of the minority shareholders against the purported "PAC" or "persons acting in concert" as regards the latter's obligations to them under the provisions of the Code on Take-Overs and Mergers and the relevant provisions of the CMSA. As such, even if there are persons acting in concert, it is the minority shareholders who ought to sue and not the Plaintiffs.

4. Accordingly, the basis upon which the Plaintiffs claim to be "aggrieved persons" falls, bringing along with it any locus standi the Plaintiffs allege they may have to commence this OS 246.

5. Further, whilst prayer 6.1 of the OS 246 seeks to compel the Securities Commission to act, however, the Securities Commission is not made a party in these proceedings.

This is an important case where it appears to be the first case in Malaysia where the Court held that the "target" or "subject matter" company has no locus standi in respect of an allegation of 'persons acting in concert' and/or suit under Section 360 CMSA or breach of Takeover Code/Rules.


Fileforce Sdn Bhd v Lai May Ting & Ors [2020] 4 MLRH 93
[Setting aside of an Anton Pillar Order]

Justin was the counsel for the Plaintiff in this case. The 1st Defendant applied to set aside the Anton Pillar Order granted but was unsuccessful. In refusing to set aside the Anton Pillar Order, the Court found that it was quite clear that while in the employment of the Plaintiff, the 1st Defendant is strictly forbidden to divulge any information or trade secret to its customers and from the facts of the case, there exist a strong arguable case which inter alia justified the Anton Pillar Order granted.


Riders Lodge Sdn Bhd v Tropik Sentosa Sdn Bhd & Anor [2020] 8 AMR 283
[Claim for specific performance - refusal by defendants to renew lease]

Justin was the counsel for the plaintiff. This case deals with the important issue of the Specific Performance of a Lease Arrangement for 30 years structured with an initial 5 years plus subject to a Renewal every 5 years for 5 renewable terms. The High Court granted the said Specific Performance after a Full Trial based on inter alia the following:

(a) The Court held that there was an agreement between parties of a 30 years lease broken down to 6 terms of 5 years each and the option to renew the said Lease lies solely and absolutely on the Plaintiff.

(b) The Court held that the doctrine of equitable estoppel apply to the present case to prevent the Defendants from the non- renewal of the Lease and/or alleging that he Plaintiff is a "monthly tenant" given the huge sums of monies expended by the Plaintiff to build the Horse Ranch ( Riders Lodge) on the said Land and rely on remaining tenure of the 30 years lease promised from the outset.

(c) The earlier notice by the Plaintiff's solicitors' letter dated 6/1/2009 asked for renewal for another 5 years and "thereafter for each renewal due" and this phrase clearly shows the Plaintiff intended to renew the lease not only for the period of 5 years from 21/5/2009 to 20/5/2014 but also for the 4 renewable terms of 21/5/2014 to 20/5/2019 (third term), 21/5/2019 to 20/5/2024 (fourth term) , 21/5/2024 to 20/5/2029 ( 5th term ) and 21/5/2029 to 20/5/2034 ( 6th term).

(d) The Defendants who received gross revenue sharing (which only exists under the lease agreement) and/or who accepted rent with knowledge of the cause of forfeiture had thereby waived the forfeiture.

(e) On the separate loan issue, when a loan is unsecured, non-interest and has no fixed repayment terms, the said loan is repayable within a reasonable time of a request for repayment depending on the circumstances of the case and it is not repayable immediately. It is untenable for a demand for the repayment of the said Loan to be made all at once when the Plaintiff is generally making losses overall in recent years and an immediate repayment of the said Loan sum is very damaging and harmful to the Plaintiff's business, operation and finances.

(f) The Court granted a specific performance of the renewal of the lease until 2034 and also the Plaintiff is entitled to lodge a caveat on the said Lease Land to protect the Plaintiff's interests.


Soo Teck Lee & 4 Ors v Lim Geok Kim [2020] 7 AMR 852
[disqualification]

Justin was the counsel for the defendant. The plaintiff entered into a sale and purchase agreement with the defendant and claimed that there was a breach by the defendant and claimed liquidated damages from the defendant. The defendant in his defence and counterclaim, contended that the agreement was a sham. The defendant applied to disqualify the legal firm from acting for the plaintiffs on the ground that the 4th plaintiff is a partner in the said firm and has a pecuniary interest in the action and that the other partner of the firm had purportedly witnessed the execution of the agreement. It is not disputed that both partners in the law firm are potential material witnesses in the action if it proceeds to trial. The High Court allowed the defendant's application to disqualify the law firm from acting for the plaintiffs.

The High Court also rejected the submission that the legal firm can still act for the relevant partners who will not be conducting the trial when inter alia the proximity of relationship of the partners and the legal assistants are too close for comfort to ensure a conflict of interest will not arise.