Back
2021 MarsdenLR 2547
HIGH COURT MALAYA PULAU PINANG
CHAN ENG LEONG & ANOR – Appellant
Versus
GOH CHOON KIMN & ORS (ENCLS 70 & 59) – Respondent
[Civil Suit No: PA-22NCVC-8-01/2020]
Procedural safeguards in contempt proceedings require strict compliance; failure to serve notices to show cause personally is fatal to the application.
Headnote:(A) Rules of Court 2012 – Order 45 r 5 – Interlocutory injunction – Two applications were made regarding a committal order against the proposed contemnors and for setting aside the leave – The court set aside the leave and struck out the application for committal due to failure of proper service and lack of sustainable case for contempt (Paras 41, 45, 82).
(B) Procedural safeguards in contempt proceedings – The requirement for personal service of notices to show cause is mandatory and a fatal defect if not complied with – The court emphasized the need for strict adherence to procedural rules in such serious matters (Paras 53, 54).
(C) Lack of Sustainable Case – The Applicants failed to establish a sustainable case for contempt against the Proposed Contemnors based on the letters and incidents presented (Paras 81, 82).
Facts of the case: This case involved a shareholders' dispute and an application for leave to apply for an order of committal against several defendants for breaching an interim injunction order.
Findings of Court: The court found that the applications for committal were unsustainable due to procedural deficiencies and that proper service was not established, leading to the decision to set aside leave and strike out the committal application.
Issues: The main issues included the adequacy of service of notices to show cause and whether contempt was established based on the actions of the Proposed Contemnors.
Ratio Decidendi: The court concluded that procedural safeguards must be strictly observed in contempt matters and lack of compliance rendered the applications invalid.
Result: The applications for leave to apply for committal were dismissed.
Key Points: - Personal service of notices to show cause is mandatory in contempt proceedings; failure to serve personally is a fatal defect (!) (!) (!) (!) . - Procedural safeguards in contempt proceedings must be strictly complied with, and non-compliance renders the proceedings invalid even if no prejudice results (!) (!) (!) (!) . - The applicants’ case was unsustainable because the notices were not properly served and the alleged breaches did not constitute a sustainable case of contempt (!) (!) (!) .
What is the requirement for serving notices to show cause in contempt proceedings?
What are the consequences of failing to comply with procedural safeguards in contempt proceedings?
On what grounds did the court find that the applicants failed to establish a sustainable case of contempt?
JUDGMENT
(Lampiran 70 dan Lampiran 59)
Introduction
[1] There were 2 applications before me. These applications follow an ex parte order dated 5 June 2020 granting the first (P1) and second (P2) plaintiffs ("Applicants") leave to apply for an order of committal against the proposed contemnors ("Leave").
Proposed Contemnors
[2] The proposed contemnors were the first (D1) and second (D2) defendants and 4 other non-parties, namely:
(a) Goh Kim Heong ("GKH") - he is D1 and D2's nephew;
(b) Goh Choon Seang ("GCS") - he is the D1's brother;
(c) Goh Kooi Cheng ("GKC") - she is the D1 and D2's daughter; and
(d) Sinar Suria Forwarding & Shipping Sdn Bhd ("Sinar Suria") - they are a freight forwarding company with a long-standing business relationship with the third defendant (D3).
(Collectively referred to as the "Proposed Contemnors")
The 2 Application
[3] There 2 applications were:
(1) The Applicants' application, having obtained Leave, for an order of committal against the Proposed Contemnors (Encl 59); and
(2) The Proposed Contemnors' application to set aside the Leave (Encl 70).
Decision
[4] As the issues in the 2 applications overlapped substantially, I heard them together. After hearing parties, I allowed the Proposed Contemnors' application to set aside the Leave (Encl 70) and, having set aside the Leave, I struck out the Applicant's application for committal (Encl 59). These are the grounds for my decision.
Background
[5] The background facts are as follows. This is a shareholders' dispute. The protagonists are the P1 and P2 on the one side and the D1 and D2 on the other. The company subject of the dispute is D3.
D3 Nominal Party
[6] D3 was a nominal defendant. They were separately represented in the proceedings. There is no issue between the Applicants and the D3 and, more significantly, between 'D1 and D2' and D3.
Application For Interlocutory Injunction
[7] The Applicants commenced the suit was on 7 January 2020. They simultaneously filed an application for an interlocutory injunction ("Injunction Application") [Encl 3].
Return Date
[8] On the return date of the Injunction Application (14 January 2020), all the parties were represented:
(a) The Applicants: Karin Lim (with A. Suppiah);
(b) D1 and D2: Ang Boon Pin (with Chuah Wei Bing); and
(c) D3: Lim Choon Khim (with Vivianne Khoo).
Applicants' Terms On Order
[9] D1 and D2 sought to adjourn the hearing of the Injunction Application to facilitate the filing of their affidavits in reply. The Applicants were amenable to the request provided that the Court made on order for an ad interim injunction on the terms of the Injunction Application.
[10] After some preliminary jostling, common sense prevailed. The parties agreed that the hearing be adjourned subject to an ad interim injunction on the terms of the Injunction Application so that affidavits may be exchanged to facilitate the proper hearing of the Injunction Application.
[11] Hence, in so far as the Applicants' interest was concerned, the Court made an order for an ad interim injunction on the terms of the Injunction Application - to restrain D1 and D2 from convening, holding or allowing to be held any meeting to remove the Applicants, and/or appointing D1 and GKH, as directors the D3 ("Applicants' Terms"). This was para 1 of the Ad Interim Injunction Order.
D3's Terms On Order
[12] D3, as a separate corporate entity and separately represented, then sounded out their concern that D1 and D2 may physically disrupt the business operations by coming onto the business premises and interfering with the staffs' work.
[13] D3 made an oral application for an order to restrain the D1 and D2 from coming onto the business premises and interfering with the staff. D1 and D2 agreed thereto. In fact, parties came up with the wordings of the order for the Court's endorsement.
[14] It was in this context that the Court made the following order ("D3's Terms") in addition to the Applicants' Terms:
"An Order that the Defendants whether by themselves personally
