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2021 MarsdenLR 4259
HIGH COURT MALAYA KUALA LUMPUR
TER THIAN TIN – Appellant
Versus
TER WEI HONG & ORS – Respondent
[Suit No: WA-22NCC-256-06/2020]
The plaintiff's action was dismissed due to lack of merit, established by previous acquiescence to directors' appointments, indicating an abuse of court process.
Headnote:(A) Rules of Court 2012 – Order 18 – Application for injunctive relief – Plaintiff's application for an injunction against the Defendants to prevent a board meeting was dismissed due to lack of serious issues to be tried, highlighting acquiescence in previously discussed appointments – Defendants' applications to strike out claims were allowed based on abuse of process. (Paras 40, 63)
(B) Estoppel – Acquiescence – Plaintiff's previous conduct indicated acknowledgment of appointed directors, negating claims of invalidity. (Paras 34, 37)
Facts of the case: The Plaintiff, integral to the management of Chiptar Holding Sdn Bhd, challenged the validity of directors' appointments, alleging breaches of internal company regulations while having previously consented to related resolutions.
Findings of Court: The Court found the Plaintiff's claims unsustainable as he had acquiesced to the directors' appointments and was attempting to obstruct the management's functions, indicating an ulterior motive to hinder financial oversight. (Paras 62, 70)
Issues: The Court addressed whether the Plaintiff had a bona fide serious issue to be tried and considerations of balance of convenience in granting the injunctions. (Paras 19, 56)
Ratio Decidendi: The Court ruled that the Plaintiff's application for an injunction lacked merits, affirming the principle that the courts do not interfere in the internal management of companies absent genuine claims. (Paras 44, 48)
Result: Plaintiff's injunction application dismissed with costs; Defendants' applications to strike out allowed.
JUDGMENT
[1] There are three applications before the Court - encl 4 made by the Plaintiff for injunctive reliefs; encl 23 made by the 1st, 2nd and 4th Defendants pursuant to O 18 r 19(1)(a), (b), (c) and/or (d) Rules of 2012 (ROC 2012) and/or under O 92 ROC 2012 under the inherent jurisdiction of the Court for striking out the Plaintiff's claim and encl 65 made by the 3rd and 5th Defendants pursuant to O 18 r 19(1)(a), (b), (c) and/or (d) ROC 2012 and/or under the inherent jurisdiction of the Court for striking out the Plaintiff's claim.
[2] On 24 November 2020, I heard all 3 enclosures and then stood the matter down for decision on the same day. I dismissed encl 4 with costs and allowed encl 23 and 65 for striking out with costs.
[3] As the matters were related, it is convenient to deal with all the 3 enclosures in one judgment. This judgment as such contains the full reasons in amplification of the grounds delivered on 24 November 2020 for dismissal of encl 4 and why encl 23 and 65 were allowed.
Background
[4] The Yu Chai @ Ter Swee Leong ("TSL") was the governing will and mind of Chiptar Holding Sdn Bhd ("the Company") until his demise on 1 February 2020.
[5] The shareholders and directors of the Company were always subservient and accustomed to acting on TSL's instructions.
[6] The Company is a family owned investment company with its prime asset being the shareholding in Thai Hong Chan (KL) Sdn Bhd ("THCSB").
Prior to the demise of TSL, all the shareholders of the Company were also directors (except for the 1st Defendant).
[7] TSL married Chia Pek Lim and in his life time had a union with 3 other women, Chang Ngi Mooi ("the 2nd family" also "CNM"), Chan Yin Seng ("the 3rd family", also "CYS") and Li Yuhua ("LY").
[8] The Plaintiff is from the 2nd family, whilst the1st Defendant (D1) is from the 3rd family, the 3rd and 5th Defendants (D3 and D5) are sister and brother from the 1st family.
[9] The 2nd Defendant (D2) is the former tax agent of the Company, holding a Power of Attorney of 6% shares in the Company for LY and was appointed on 4 March 2020 to be LY's alternate director whilst the 4th Defendant (D4) was also appointed on 4 March 2020 to be alternate director to D1.
[10] Until 5 November 2019, the shareholdings of the Company are as follows:
[11] The day to day management of the Company and THCSB were entrusted to the Plaintiff.
[12] A few months before TSL passed away, 30% of TSL's shares in the Company were transferred to the Plaintiff on 6 November 2019; this transfer is under dispute and dealt with in separate proceedings. The altered shareholding of the Company is currently as follows:
[13] In encl 4, the Plaintiff sought an interim injunction to:
(a) Prevent the Defendants whether by themselves, servants, representatives, agents, proxies and/or any individual, company, party connected to the Defendants from holding a board of directors meeting of the Company scheduled on 26 June 2020 ("Intended Meeting") and/or at any adjourned meeting to discuss, approve any of the following resolutions and/or resolutions to similar effect until disposal of the trial:
(1) to review and revamp the entire management of the Company.
(2) to review the tenancy agreements and stipulate the terms and conditions of new leases.
(3) to change the authorized persons to operate Public Bank Berhad's e-banking.
(4) to empower the Corporate Representative Ms Ter Siew Lan [D3] and or her nominees to conduct due diligence on THCSB's Accounts.
(b) Costs of application to be costs in the cause;
(c) Such other relief as deemed fit by the Court.
The Plaintiff's Case
[14] The Plaintiff claims that the following appointments pursuant to the directors' circular resolutions ("DCR") dated 4 March 2020 are null and void as it was done without the Plaintiff's consent and in breach of art 90 of the Articles of Association ("AA"):
(i) D1 as a director of the Company ("the 1st resolution");
(ii) D2 as the alternate director to LY;
(iii) D3 as the alternate dir
