The court ruled that discovery was necessary to address core issues of mental capacity and deception regarding the 1st Defendant in share transfer proceedings, reinforcing fair trial principles.

JUDGMENT

Liza Chan Sow Keng JC:

Introduction

[1] Enclosure 135 is the 3rd Defendant, Puncak Kenangan (M) Sdn Bhd ("Puncak")'s application for discovery against the 1st Defendant pursuant to O 24 r 7 of the Rules of 2012 (" ROC 2012").

[2] On 25 August 2021, the 3rd Defendant's application was allowed with costs. This judgment contains the reasons as to why Encl 135 was allowed.

Background

[3] By this action, the 1st Plaintiff ("Sitrac") and 2nd Plaintiff ("Kelana Jati") seek to impugn a Court Order dated 21 May 2019 obtained by the 1st Defendant ("D1") on 21 May 2019 against the 2nd Defendant ("SSM") and to strike out and/or set aside Originating Summons No WA-24NCC-131-03/2019 ("OS 131") in its entirety on the ground that the 1st Defendant has practised deception on the Court through deliberate and conscious concealment of evidence relevant and material in OS 131 in obtaining the Court Order dated 21 May 2019 ("the impugned Court Order"). The Plaintiffs claimed that but for such conscious and/or deliberate dishonesty and misrepresentation by D1, the Court in OS 131 would not have allowed the appeal against SSM's decision and directed that SSM reconsider their decision and OS 131 would have been set aside and/or struck off.

[4] D1 holds one (1) registered share in Puncak and no registered shares in Sitrac.

[5] SSM, the 2nd Defendant is a Nominal Defendant in this action, as they were a party to which the impugned Court Order was obtained against.

[6] Puncak, as the 3rd Defendant herein is also a Nominal Defendant, as they were the transferor of the 75,000 shares in Sitrac to Kelana Jati and was served and mentioned in the impugned Court Order.

[7] On 26 April 2018, D1 pursuant to s 602(4) of the Companies Act 2016 (" CA 2016 ") applied to SSM for rectification of the register of Members of the 1st Plaintiff, Sitrac, namely, rectification of 75,000 shares in Sitrac that was transferred by Puncak to Kelana Jati on 17 April 1992, on grounds that there was no authorisation by Puncak, and no consideration was paid (the "Rectification Application").

[8] By letter dated 20 September 2018, SSM refused D1's Rectification Application on the basis that it did not have the power to deal with the same as it does not concern an "error, mistake or omission" which arose "in the ordinary course of the discharge of the duties of the Defendant" within the meaning of s 602(3) CA 2016, and the long delay of 25 years.

[9] D1 then filed OS 131 to appeal against the decision of the SSM in refusing his Rectification Application.

[10] On 21 May 2019, the Court in OS 131 made an order against SSM:

"The Defendant shall reconsider the Plaintiff's application dated 26 April 2018 under s 602(1), Companies Act 2016 , and for that purpose, the Plaintiff is to give notice to Sitrac Corporation Sdn Bhd, Puncak Kenangan Sdn Bhd and Kelana Jati Sdn Bhd of his application and serve his application on the said three companies pursuant to s 602(2)(b), " (the "Order")."

[11] It was also claimed by the Plaintiffs that:

(i) they were only made aware of OS 131 when they were served the impugned Court Order and the Rectification Application by D1's solicitors;

(ii) D1 did not make the Plaintiffs parties to OS 131 even though he sought not only to rectify the Register of the 1st Plaintiff but also to deprive the 2nd Plaintiff of its shares in the 1st Plaintiff.

[12] The gist of the 1st Defendant's defence in this action is that the Court in OS 131 did not consider the merits of the Rectification Application in making the impugned Court Order. So the issue of fraud, deception or non disclosure of facts do not arise.

[13] After 2 days of trial on 11 January 2021 and 12 January 2021 with the Plaintiffs calling one witness, the Plaintiffs closed their case. The trial was fixed for continuation on 8th, 9 April 10th, 11th and 29 June 2021.

[14] On 8 April 2021, being the 3rd day of trial, D1's counsel tendered a medical certificate issued by Dr Soraya of the Gleneagles Hospital which