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2021 MarsdenLR 1263

HIGH COURT MALAYA KUALA LUMPUR
CHUAH SEONG KEAT & ORS – Appellant
Versus
DIN TAN YONG CHIA & ORS – Respondent
[Originating Summons No: WA-24NCC-559-12/2020]



Petitioner Advocates:Alvin Tang,Tan Chong Lii,Eng Chee,Teo Ju-Li ,Respondent Advocate: H R Dipendra,Hoo Kit Yee,Gary Yap,Tong Joe Jye

Trademark Claims unrelated to oppression action under s 346 of the Companies Act; must be struck out for being outside the ambit of company law.

Headnote:(A) Companies Act 2016 – Section 346 – Oppression action regarding control of corporate management and trademark claims – Plaintiffs alleged breaches of fundamental understanding among shareholders of the Thai Odyssey business, claiming wrongful ousting of P1 from management roles and unfair dilution of shareholding – The court ruled that the Trademark Claims do not arise from the oppression complaints and must be struck out as they concern separate causes of action not related to company law – The reliefs sought under the oppression action must address proven oppressive conduct strictly in line with s 346 of the CA 2016. (Paras 20-52)

Facts of the case: The plaintiffs, alleging oppression, claimed wrongful management ousting in the Thai Odyssey joint venture and sought to dissolve their association in the venture through winding up or share purchase.

Findings of Court: The court determined that trademark claims were independent and unrelated to the oppression claims and held that they ought to be struck out for being outside the ambit of s 346.

Issues: Distinction between trademark claims as personal claims versus shareholder oppression issues regarding corporate governance and management.

Ratio Decidendi: The court maintained that the oppression action under s 346 must be limited to matters of corporate governance, rejecting claims that diverged into personal territory such as trademark ownership.

Result: Application for striking out granted, with costs awarded.

JUDGMENT

Ong Chee Kwan JC:

[D7 and Dll's Striking Out Application - Enclosure 15]

Introduction

[1] The Originating Summons dated 16 November 2020 ('OS') is an oppression action filed by the Plaintiffs under s 346 of the Companies Act 2016 ('the CA 2016').

[2] Enclosure 15 is the 7th Defendant's ('D7') and the 11th Defendant's ('D11') application to strike out certain prayers in the OS and certain paragraphs in the Affidavit in Support affirmed by the 1st Plaintiff ('P1') on 16 November 2020 ('P1 AIS') on the ground that these are matters pertaining to personal claim of trademarks and domain name by P1 which are outside the ambit of an oppression action under the CA 2016 (the 'Trademark Claims').

Background Facts

[3] The oppression action stems from alleged breaches of the fundamental understanding between the founding shareholders of the Thai Odyssey business, which is operated through inter alia the 7th to 22nd Defendants ('the Thai Odyssey Group').

[4] The Thai Odyssey business was initially commenced by P1 in 2003, under a company known as Touches De Siam Sdn Bhd, offering Thai massage services.

[5] After the initial expansion of the business, the 1st to 3rd Plaintiffs entered into a joint venture with one Tan Sri Danny Tan to further expand the Thai Odyssey business. Tan Sri Danny Tan's involvement in this business venture was through his proxies, Sze Tho Kok Onn and Teh Saik Hin ('the Proxies').

[6] The Thai Odyssey joint venture started with 2 companies (namely the D7 and the 20th Defendant ('D20')), which were owned by the 1st to 3rd Plaintiffs on the one part and the Proxies on the other.

[7] The principal terms of the joint venture of the Thai Odyssey business were set out in the following agreements:

a) the Joint Venture Agreement dated 21 May 2004 between the P1 and the Proxies in respect of D20 ('JV-RBSB');

b) the Joint Venture Agreement dated 21 May 2004 between the 1 to 3rd Plaintiffs and the Proxies in respect of D7('JV-TOSB').

('the JV Agreements')

[8] Some of the key terms of the joint venture are as set out in the following clauses, reproduced from JV-RBSB:

"3. DIRECTORS AND DIRECTORS' MEETING

...

3.3 The Chairman of the Board of Directors of the Company shall be Chuah Seong Keat...

...

9. SERVICES PROVIDED BY THE FIRST PARTY

9.1 In consideration that the First Party shall be in charge of the management, operation and administration of the Company and day to day running of the business...

...

19. CHANGE OF TRADING/BUSINESS NAME

19.1 The parties agree that the trading name of the Business shall be known as "Thai Odyssey" and the parties further hereto agree that the name of the Company shall be changed to exclude the name "Thai Odyssey" upon the First Party ceasing to be a shareholder of the Company.?

19.2 The name change shall be effected not later than sixty (60) days from the date the First Party ceases to be a shareholder of the Company.

19.3 Notwithstanding anything to contrary contained in the foregoing provisions, the Company shall from the date of the First Party ceasing to be a shareholder of the Company immediately discontinue any previously permitted use of the name "Thai Odyssey" and any trade mark or logo of the First Party.

19.4 The Company shall have no right to any compensation for goodwill, customers' profits, expenses or for any other loss or damage arising as a result of the provisions contained in this Clause.

...

26. SUCCESSORS BOUND

26.1 This Agreement shall endure for the benefit of and be binding on each of the parties hereto and their respective successors in title and permitted assigns."

[Emphasis Added]

[9] In essence, the fundamental terms which form the basis of the Plaintiffs' association with the Thai Odyssey business are as follows:

1) The P1 is in charge of the management, operation, administration and day to day running of the Thai Odyssey business.

2) The P1 shall be the Chairman of the Board of Directors for the companies.?

3) The trading name of the business venture shall be known as "Thai Odyssey".

4)


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