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2022 MarsdenLR 709
HIGH COURT MALAYA JOHOR BAHRU
YAK THYE PENG – Appellant
Versus
YAK TIONG LIEW & ORS – Respondent
[Originating Summon No: JA-24NCC-29-11/2019]
Amendments to pleadings cannot change the character of defense or be based on inadequate justification for delay, especially where substantive facts are disputed.
Headnote:(A) Rules of Court 2012 – Order 20 r 5(1) – Order 14A – Derivative action – Plaintiff, a shareholder and director, sought to declare properties as beneficial to the 3rd Defendant and demanded certain actions from the 2nd Defendant, her brother-in-law – Court found that the amendment sought by the 1st and 2nd Defendants to state the Plaintiff's lack of locus standi was a change in character of the defence and lacking sufficient justification for delay – Amendment application dismissed. (Paras 11-19)
(B) Derivative Action – Applicability – The court determined that given the substantial disputes of facts regarding the alleged oppression by the 1st and 2nd Defendants against the Plaintiff, Order 14A was not suitable for resolution of the case as it required full trial to consider evidence thoroughly. (Paras 20-27)
Facts of the case: The Plaintiff filed suit seeking declarations regarding property ownership and actions against the 2nd Defendant. The 1st and 2nd Defendants attempted to amend their pleadings and sought to dismiss the Plaintiff's action under various grounds.
Findings of Court: The amendment application from 1st and 2nd Defendants was dismissed as it was seen as an afterthought and failed to provide reasonable explanations for the delay.
Issues: The main questions were whether the Plaintiff had locus standi, if the action was oppressive or a derivative action, and whether the action should be dismissed.
Ratio Decidendi: The proposed defenses indicated a change of character in the application, lacking the required justification for amendments, and the presence of disputed facts necessitated a full trial rather than a summary process.
Result: Applications dismissed with costs for the amendment, and no costs for the application to determine points of law.
JUDGMENT
Brief Background
[1] These are two applications filed by the 1st and 2nd Defendants to seek this Court's order for their pleading be amended under O 20 r 5(1) of ROC 2012 and for the disposal of this suit on point of law under O 14A of 2012, respectively.
[2] As a brief background, the Plaintiff and the 1st Defendant are siblings and holding 47% shares respectively in the 3rd Defendant (which is a company). The 2nd Defendant is the 1st Defendant's wife and a director in the 3rd Defendant.
[3] On 4 November 2019, the Plaintiff commenced a suit against the Defendants by way of an Originating Summons seeking for the following prayers, inter alia, a declaration that the 3rd Defendant is the beneficial owner of ten units of properties (the "Properties") listed in the Summons and the 2nd Defendant is holding them as a trustee on behalf of the 3rd Defendant.
[4] The Plaintiff also sought an order from this Court for the 2nd Defendant be directed to sign the necessary documents as to sell the Properties to a third party and the proceed of the sale to be surrendered to the 3rd Defendant. As an alternative, the Plaintiff sought that the Properties to be transferred to the 3rd Defendant.
[5] To support the application, the Plaintiff filed the Affidavit-in-Support on 6 December 2019 in encl 2. Subsequently, on 19 February 2020, the 2nd Defendant filed the Affidavit-in-Reply on behalf of the 1st and 2nd Defendants in encl 8.
[6] On 5 March 2020, the Plaintiff filed the Affidavit-in-Reply in encl 9 and on 5 May 2020, the 2nd Defendant filed the Affidavit-in-Reply to the Plaintiff's Affidavit-in-Reply on behalf of the 1st and 2nd Defendants in encl 10.
[7] On 26 May 2020, the Plaintiff and the 1st and 2nd Defendants filed their submissions in encls 16 and 18 respectively regarding the Originating Summons. The 1st and 2nd Defendants as well as the Plaintiff filed their further written submissions on 11 October 2020 (in encl 21) and on 12 October 2020 (in encl 23) respectively.
[8] The 1st and 2nd Defendants on 26 October 2020 filed their further written submission in encl 25 as to reply to the Plaintiff's written submission.
[9] During the oral submission on 6 May 2021, the learned JC Ahmad Murad Abd Aziz requested the parties to submit on the issue of derivative action on the next hearing date. On 9 June 2021, before the oral submission started, learned solicitor for the Plaintiff requested that this Originating Summons be converted into Writ under O 28 r 8 ROC 2012 on the ground that this action involves substantial dispute of facts. As there was no objection from the 1st and 2nd Defendants' solicitor, the request was allowed by the learned JC and the proceedings to continue as if the matter had been begun by Writ and all affidavits shall stand as pleadings.
[10] Subsequently, on 25 July 2021, the 1st and 2nd Defendants filed two notice of applications in encls 29 and 31 as to amend their Affidavit- in-Reply which was filed on 19 February 2020 under O 20 r 5(1) of ROC and as to seek an order from the Court under O 14A or O 33 and O 92 r 4 of the 2012 for determination of question of law of the following:
(a) whether the Plaintiff as a shareholder and a director of the 3rd Defendant has locus standi to commence an action against the Defendants;
(b) whether the Plaintiff's action against the Defendants is an oppressive or derivative action;
(c) if the Plaintiff's action is a derivative action, whether the Plaintiff fails to comply with the procedure for the derivative action under s 347 of the Companies Act 2016 ;
(d) whether the Plaintiff has no cause of action against the Defendants and the Plaintiff's action is frivolous, vexatious and an abuse of Court process; and
(e) whether the Plaintiff's action should be dismissed or struct out.
The 1st And 2nd Defendants' Application To Amend Pleading
[11] Order 20 r 5(1) of ROC authorises the Court to allow any party to amend pleadings at any time. The provision reads:
Amendment of wr
