The court ruled that cross-examination is essential in oppression cases to resolve significant factual disputes and assess credibility, ensuring a fair and just outcome.

Atan Mustaffa Yussof Ahmad J:

[1] This judgment concerns an application for leave to cross-examine deponents in an oppression action under the Companies Act 2016 . The underlying dispute involves a minority shareholder who claims he was wrongfully removed as director and had his shareholding diluted through a share allotment to a new director. The applicant seeks to cross-examine witnesses on three main issues: whether the company operates as a quasi-partnership, the circumstances leading to the shareholder's removal as director, and allegations of financial misconduct. The application was filed approximately six months after the exchange of the main affidavits and two months before the scheduled hearing date of the oppression action. The respondents oppose the application on grounds that it was filed with undue delay, the disputed facts are not central to the core issues, and there is sufficient documentary evidence for determination. This matter requires the court to consider whether particular circumstances justify departing from the usual practice of determining such applications on affidavit evidence alone.

Background Facts

[2] CJ Polymers Sdn Bhd was incorporated on 16 February 2001. By 27 December 2018, the shareholding structure consisted of thePlaintiff, Kerk Han Meng, ("Kerk") and the 4th Defendant, Sim Chin Hu, ("Sim") as equal shareholders, each holding 10,000,000 shares. On 12 September 2019, both Kerk and Sim transferred 300,000 shares each to the 1st Defendant, Lee Yu Meng, ("Lee") resulting in Kerk and Sim each holding 48.5% (9,700,000 shares) and Lee holding 3% (600,000 shares).

[3] On 23 December 2021, CJ Polymers allotted 6,000,000 additional shares, with 5,820,000 going to Kerk and 180,000 to Lee. This changed the shareholding structure to: Kerk with 59.7% (15,520,000 shares), Sim with 37.3% (9,700,000 shares), and Lee with 3% (780,000 shares).

[4] In March 2020, Sim filed Kuala Lumpur High court Originating Summons No WA-24NCC-138-03/2020 ("OS138") against CJ Polymers, Kerk and Lee under s 346 of the Companies Act 2016 , claiming oppression based on his alleged legitimate expectation to participate in CJ Polymers' management due to a quasi-partnership with Kerk. Kua Chin Wee, the 2nd Defendant, ("Kua") was brought in as a defendant in OS 138 because he was a shareholder who had purchased 1/3 stake in CJ Polymer and was allegedly involved with the Kerk and Lee in oppressing Sim's rights by orchestrating the transfer of 3% shares to break the 50:50 deadlock, which enabled them to remove Sim from management. The High court on 9 November 2022 found in Sim's favour, holding that CJ Polymers was formed as a quasi-partnership between Sim and Kerk with an understanding that both would participate in management as long as they remained shareholders, and ordered that Sim's shares be bought out by CJ Polymers and/or alternatively by Kerk, Lee or Kua at fair value to be determined by an independent valuer.

[5] Both Kerk and Lee filed appeals against this decision in Appeal No W-02(NCC)(A)-2148-11/2022 ("Appeal 2148"), which was pending and scheduled for hearing on 29 May 2024. Kerk has since filed a Notice of Discontinuance of his appeal on 20 May 2024.

[6] On 29 August 2023, Lee passed a circular resolution declaring that Kerk had vacated his office as director of CJ Polymers. On the same day, the 3rd Defendant, Wong Kok Kheong ("Wong") was appointed as a director. Shortly after, on 6 September 2023, CJ Polymers allotted 26,000,000 shares to Wong at RM0.05 per share, doubling the total issued shares to 52,000,000. This created a new shareholding structure: Wong with 50% (26,000,000 shares), Kerk with 29.85% (15,520,000 shares), Sim with 18.65% (9,700,000 shares), and Lee with 1.5% (780,000 shares).

[7] On 18 September 2023, Kerk was prevented from entering CJ Polymers' office. That same day, CJ Polymers engaged BDO Malaysia for a forensic investigation into certain transactions.

[8] On 29 September 2023, Lee lodge