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2021 MarsdenLR 3366
HIGH COURT MALAYA KUALA LUMPUR
JEGA JOTHY C THIAGARAJAH & ORS – Appellant
Versus
SHANMUGAM ANA KINGGAR SALAM & ORS – Respondent
[Civil Suit No: WA-22NCVC-572-09/2020]
A plaintiff must demonstrate locus standi to bring a suit, particularly the necessity of suing via the registered public officer of an association under the Societies Act.
Headnote:(A) Societies Act 1966 – Section 9(c) – Rules of Court 2012 – O 18 r 19 – Striking out a claim – Plaintiffs failed to establish locus standi to sue on behalf of the Temple as members not entitled to initiate suit – The management committee is the proper party to act on behalf of the Temple – The plaintiffs did not show sufficient personal interest or nexus to claim for damages on behalf of the Temple. (Paras 29-35, 45-52)
(B) Misappropriation – Allegations of misappropriation of funds lacked specificity – General allegations insufficient to sustain claims against third defendant – Claims struck out for failing to disclose a reasonable cause of action. (Paras 56-74)
Facts of the case: Plaintiffs, devotees and donors to the Temple, initiated a writ action alleging fund misappropriation by its management committee. The third defendant was previously the treasurer. The crux of the dispute involved allegations of misconduct by the defendants in managing Temple funds.
Findings of Court: Third defendant's application to strike out the plaintiffs' claims due to lack of locus standi and specifics in allegations allowed.
Issues: Main issues revolved around plaintiffs' standing to sue and the clarity of allegations against the third defendant.
Ratio Decidendi: The court held that the management committee has the requisite standing to sue as plaintiffs did not possess sufficient interest or standing to institute suit. The specifics of accusations against the third defendant were not adequately pleaded.
Result: Application to strike out allowed.
JUDGMENT
Introduction
[1] This was an application by the third defendant to strike out the statement of claim filed by the plaintiffs, primarily by reason of the lack of locus standi.
[2] At the conclusion of the hearing which was conducted via zoom remote communication technology, I allowed the application and provided the principal grounds for the same. This judgment contains the full reasons for my decision.
Key Background Facts
[3] At the heart of the dispute is Rumah Berhala Sri Nageswari ("the Temple"). It is a Hindu temple located in Jalan Lengkok Abdullah, Off Jalan Bangsar, in Kuala Lumpur. It is also registered as an association under the Societies Act 1966 , since 1979.
[4] The first and fourth plaintiffs are devotees and donors of the Temple. The second, third, fifth and sixth plaintiffs are its life members.
[5] The first and second defendants are the chairman and secretary of the management committee of the Temple, responsible for its management and upkeep and the third defendant was previously its treasurer (for a long time until 19 September 2019). The fourth defendant is a director of the fifth defendant company.
[6] The six plaintiffs filed a writ action against the five defendants. The plaintiffs pleaded that the relevant defendants committed various misconduct such as breach of trust and misappropriation of the funds and properties of the Temple.
[7] Focussing on the third defendant (the applicant in the instant striking out), the plaintiffs argued that a number of incidents demonstrate that the third defendant was complicit in misappropriating funds belonging to the Temple during the material time when he was holding the position of its treasurer.
[8] It was pleaded among others that the third defendant had allowed the withdrawal of a sum of RM 70,000.00 by the first defendant from the association's account, failed to account for the excess RM 3000.00 that was paid for the temple site rent, allowed the salary of employees of the Creative Sculptors (the Indian construction company tasked to hire and manage employees from India to execute interior construction of the temple) to be increased from RM 2000.00 monthly to RM 200.00 daily under the instructions of the first defendant, failed to carry out his responsibility as treasurer by not complying with basic accounting principles where payments for the construction of the new temple building were made unsupported by any official or mandatory documents, failed to provide progress reports to record the development of the construction of the new temple building, and failed to recognize the breach of responsibility and breach of contract involving the construction of the new temple building. Additionally, the external auditors' reports which were issued for the years ended 31 December 2018 and 31 December 2019 also, according to the plaintiffs, raised issues of misconduct and wrongdoings which occurred during the time the third defendant was the treasurer of the Temple and for which he was involved in.
[9] The key remedies the plaintiffs prayed for include general damages, exemplary damages, special damages on funds alleged to have been misappropriated, orders for return of funds said to have been expended for various purposes as pleaded, production of books and documents to the auditors, as well as injunctions against the first, second and third defendants prohibiting them from holding positions in the association or from being involved in the renovation of the building of the Temple.
[10] In addition to seeking to defend this suit commenced by the plaintiffs, the third defendant also moved to institute this application to strike out the writ action filed by the plaintiffs against the third defendant.
[11] Before I proceed to examine the grounds for the striking out as advanced by the third defendant, and the arguments posited by the plaintiffs, it is useful that the law on striking out be stated, albeit in summary fashion.
The Law On Striking Out -
