The requirement for court leave before issuing a Third Party Notice after serving a Statement of Defence is mandatory and failure to comply renders the notice fatal.

JUDGMENT

Raja Ahmad Mohzanuddin Shah JC:

Preliminary

[1] By way of encl 151, Third Party No 5 and Third Party No 6 seek to set aside the Third Party Notice dated 4 January 2024 issued by the defendant against them, along with four other third parties.

[2] Aside from that, they are seeking to strike out the defendant's Statement of Claim issued against both of them.

[3] As alleged in encl 151, the defendant issued the Third Party Notice without obtaining leave from the court under O 16 r 1(2) of the Rules of 2012 (" ROC 2012").

An Overview Of The Case

[4] There are three plaintiffs in this case. The first plaintiff, a subsidiaryof 1Malaysia Development Berhad ("1MDB"), is engaged in strategic investments in the conventional and renewable energy sectors. It is the parent company of the second and third plaintiffs.

[5] The defendant is an existing and functioning political party.

[6] The first plaintiff's operation was funded by 1MDB via an equity capitalisation of RM1 million and a launching grant of RM20 million from the Economic Planning Unit ("EPU"). Those are not the only things. The first plaintiff obtained two loans guaranteed by the Government of Malaysia from the Retirement Fund (Incorporated) ("KWAP") worth RM4 billion.

[7] The first plaintiff retained RM400 million of this amount for its Malaysian working capital requirements. The remaining funds were transferred to the first plaintiff's foreign subsidiary, SRC International (Malaysia) Ltd, which is duly incorporated in the British Virgin Islands.

[8] The first plaintiff then proceeded to implement Corporate Social Responsibility programmes ("CSR programmes") for Malaysians it targeted, using a minimum of 50% of all excess cash profit after all required working capital cash reserves had been deducted.

[9] In order to implement the CSR programmes, the first plaintiff appointed Ihsan Perdana Sdn Bhd ("IPSB") as its CSR partner. IPSB was said to provide CSR programmes for Yayasan 1 Malaysia Development Berhad ("Yayasan 1MDB").

[10] As a result, IPSB received RM123 million from either the first plaintiff, the second plaintiff, or the third plaintiff.

[11] As part of this amount, RM16 million was allegedly transferred to the defendant for CSR purposes.

[12] The plaintiffs are now claiming that such disbursements to IPSB were made without any prior approval of the plaintiffs' Board of Directors and that they were tainted with fraud and money laundering activities, hence the plaintiffs' actions to recover those sums, including from the defendant in this case.

[13] In addition, the plaintiffs assert that their board of directors disbursed those funds fraudulently and wrongfully since the first plaintiff had no excess cash profits.

[14] Meanwhile, the defendant claims that as a political party, it is entitled to receive funds and donations and to organise and conduct charitable activities in accordance with its objectives and constitution. As for the RM16 million that it had received, it was a bona fide receiver, as it had no knowledge or involvement in the management, administration, or policy decisions made by the plaintiffs' Board of Directors.

[15] As a result of that contention, the defendant filed a third-party action against the former directors of the plaintiffs, including Third Party No 5 and Third Party No 6, who were also directors and shareholders of IPSB, as they were privy to the grant of RM16 million.

Enclosure 151: Supporting Grounds

[16] According to Third Party No 5 and Third Party No 6, the defendant issued the Third Party Notice without first obtaining leave from the court under O 16 r 1(2) of the ROC 2012.

[17] This is because when the defendant filed the Third Party Notice on 4 January 2024, it had already filed and served its Statement of Defence on the plaintiffs on 13 April 2022.

[18] Therefore, by applying a literal interpretation of O 16 r 1(2) of the ROC 2012, it is clear and unambiguous that leave of court is not required if the Third Party Notice is issued before t