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2020 MarsdenLR 3038
HIGH COURT MALAYA KUALA LUMPUR
BANK KERJASAMA RAKYAT MALAYSIA BERHAD – Appellant
Versus
ABDUL AZIZ ZAINAL & ORS – Respondent
[Suit No: WA-22NCVC-357-06-2018]
Amendments to pleadings are permissible if they ensure justice, do not prejudice the opposing party, and are made in good faith, even if they introduce a new cause of action based on the same facts.
Headnote:(A) Development Financial Institutions Act 2002 – Section 41(4)(c) – Rules of 2012 – Order 20 r 5 and Order 92 r 4 – Amendment of pleadings – Application to amend Writ of Summons and Statement of Claim to include claim for Monetary Penalty imposed due to breach resulting from Book Sponsorship – Amendment allowed as it is bona fide, does not prejudice the defendants, and does not change the character of the suit. (Paras 13, 17-22, 34-45)
Facts of the case: The plaintiff, a financial institution, alleges breach of duties and seeks recovery of RM14,991,283.20, relating to a sponsorship agreement, and damages for a Monetary Penalty imposed by Bank Negara Malaysia due to procedural breaches.
Findings of Court: Application for amendment granted; the Proposed Amendment facilitated the trial's fair resolution by accurately reflecting all facts.
Issues: Whether the amendment was bona fide, if it prejudiced the defendants, and if it changed the character of the suit.
Ratio Decidendi: The court emphasized that amendments must ensure just determination and emphasized balances of justice over strict procedural rules.
Result: Enclosure 41 allowed; costs ordered against defendants.
JUDGMENT
Introduction
[1] The Plaintiff ("P") filed an application vide Enclosure 41 ("Encl 41") to amend its Writ of Summons and Statement of Claim ("SOC"). Encl 41 was made under O 20 r 5 and/or O 92 r 4 of the Rules of 2012 ("Rules of ") and/or under the inherent jurisdiction of the Court.
[2] The 1st Defendant the 2nd Defendant ("D2"), Defendant ("D3") and the 5th Defendant ("D5") opposed Encl 41. DI, D2, D3 and D5 are collectively referred to as the "Defendants". The 4th Defendant ("D4") did not oppose Encl 41. The Defendants and D4 are collectively referred to as the "defendants".
[3] I allowed Encl 41. These are the grounds of my decision.
Background
[4] P is a financial institution incorporated under the Co-operative Societies Act 1993. DI was formerly the Chairman of P. D2 was formerly the Managing Director of P. D3 is in the business of publishing books. D5 was a director of D3 at the material time. D4 was a partner of Messrs Alira & Co ("Law Firm").
[5] P pleaded the following in the SOC. On or around 22 January 2016, D3 issued a letter to DI (in DI's capacity as the Chairman of P) for the sponsorship a book entitled 'Antara 2 Zaman Najib Tun Razak - Mendepani Cabaran dan Mengga/as Sejuta Harapan' ("Book Sponsorship"). By way of a letter dated 3 March 2016, the Law Firm informed DI that the Law Firm had been appointed as the solicitor and/or stakeholder of D3. As such, any payment made pursuant to the Book Sponsorship is be made to the Law Firm.
[6] On or around 7 March 2016, D3 issued an invoice to P for the sum of RM14,991,283.20 ("Sponsorship Amount") being the costs allegedly accrued for matters incidental to the Book Sponsorship. Subsequently on or around 17 March 2016, the Sponsorship Amount was paid by P into the client account of the Law Firm.
[7] P avers that D2 approved the request for the Book Sponsorship. The said approval was purportedly carried out under the instructions of DI. P further avers that DI and D2 failed to comply with P's procedures and processes vis-a-vis approval of the Book Sponsorship. In this connection, P alleges breach of duties, breach of contract, breach of fiduciary duties, negligence and breach of trust on the part of DI and D2.
[8] P also sued D3, D4 and D5 for monies had and received. Against all the defendants, P alleges fraud and conspiracy to defraud and injure by unlawful means. P seeks recovery of the Sponsorship Amount as well as damages.
Proposed Amendment
[9] P's case is as follows. As a result of the Book Sponsorship, P was compelled to pay a penalty of RMI ("Monetary Penalty") to Bank Negara Malaysia ("BNM"). P was notified of the Monetary Penalty vide a letter dated 22 October 2018 from BNM ("BNM Letter"). The BNM Letter said that as a result of the Book Sponsorship, P had breached s 41(4)(c) of the Development Financial Institutions Act 2002 (" DFIA ") which states:
"Every prescribed institution and a subsidiary of a prescribed institution shall at all times:
(c) whether or not standards have been specified by the Bank under this section, manage its business, affairs and activities in a manner consistent with sound risk management and governance practices which are effective, accountable and transparent. "
[10] The BNM Letter stated that P was required to make payment of the Monetary Penalty as a result of the said breach. P paid the Monetary Penalty to BNM on 15 February 2019.
[11] P contends that it is entitled to claim the Monetary Penalty sum from the defendants as the Monetary Penalty arose out of the defendants' breaches as pleaded in the SOC. P also contends that it is entitled to be indemnified by the defendants in respect of the Monetary Penalty imposed by BNM. Alternatively ,that P -is entitled to a contribution from the defendants in respect of the Monetary Penalty.
[12] Pursuant to Encl 41, P seeks to amend the SOC to plead and include particulars relating to the Monetary Penalty ("Proposed Amendment"). The Proposed Amendment avers that the Monetary Pen
