The court recognized that minority oppression claims require oral testimony due to the presence of disputed facts, determining that an originating summons should be converted to a writ action for proper adjudication.

Introduction

[1] In this case the Defendants' application for determination by this court is to convert the originating summons ('OS') filed by the Plaintiff to a writ action. The OS is premised on allegation of minority oppression under s 181 of the Companies Act 1965 on the Plaintiff by the Defendants.

Material Facts

[2] The facts only relevant for the purpose of this application are provided by the Defendants. There is no reason to depart from these facts as I find that it serves the purpose why the application for the conversion of the OS into a writ action is being made now. It is to be observed, as this is now only a preliminary application regarding the mode upon the hearing of the Plaintiff's case for minority oppression, the facts narrated here are not determinant of the substantive case but merely relevant for the current application. After all it should be noted this court is not making any decisions at this stage regarding the substantive case between the Plaintiff and Defendants on minority oppression.

[3] The Plaintiff and the Second Defendant, entered into a Joint Venture Arrangement ("JVA") which entailed the acquisition of individual plots of lands in the Imbi Area in KL (hereinafter referred to as the "Imbi Lands"), with a view to develop the same in whatever form the parties to the JVA thinks fit (the development of which is hereinafter referred to as the "Imbi Project"). To be noted this is merely an arrangement and not a formal written agreement.

[4] It was agreed that the cost of acquiring the Imbi Lands was to be borne by both parties in the proportionate ratio of 30% for Plaintiff and 70% for Second Defendant, and that this will be reflected in the shareholding of the five companies which were used to acquire the Imbi Lands, namely, West Jaya Sdn Bhd ("West Jaya"), Mulpha Kluang Maritime Carriers Sdn Bhd ("Mulpha Kluang"), Queensway Nominees (Tempatan) Sdn Bhd ("QNT"), Queensway Nominees (Asing) Sdn Bhd ("QNA"), and Leisure Dotcom Sdn Bhd ("Leisure Dotcom") (hereinafter referred to as the Joint Venture Arrangement Companies ("JV Companies").

[5] The costs of acquiring each individual plot of the Imbi Lands were broken up into 30% and 70% respectively. The 30% was then divided into a further 30% and 70%, where the Plaintiff paid its 30% share in cash, and Second Defendant paid its 70% share. It was agreed between the parties that this will be known as the "Cash Portion" towards the acquisition of the Imbi Lands.

[6] The remaining 70% cost of acquiring the Imbi Lands, were also divided into 30% and 70%, with each party paying its respective shares. However, the Plaintiff had insufficient funds to pay its 30% costs here, which caused the JV Companies to take an intercompany loan from Second Defendant, known as the "Loan Portion" to enable the Plaintiff to incrementally pay off its 30% of the Loan Portion under the JVA.

[7] A subsequent loan was taken by Caribbean Gateway Sdn Bhd ("CG") on behalf of the JV Companies, from Malayan Banking Berhad ("Maybank"), in order to pay off the intercompany loan from Second Defendant. CG is a subsidiary of Second Defendant and the reason why CG took the loan from Maybank on behalf of the JV Companies is because initially the plan was to transfer all the Imbi Lands to CG, so that one company owns all the Imbi Lands, as opposed to five different companies. The rationale here was that it would be easier for one company to deal with the Imbi Lands, whether for the purposes of a sale or development. However, this plan did not materialise