The tort of abuse of process requires demonstration that the process was initiated for an ulterior motive; failure to prove this results in dismissal.

Introduction

[1] The cause of action of the plaintiff against the nine defendants is abuse of court process and conspiracy to defraud or injure. The trial proceeded against only some of the defendants. The plaintiff did not serve the cause papers on the 8th defendant. Prior to trial, judgment in default was entered against the 6th and 9th defendants. The 1st, 2nd, 4th, 5th and 7th defendants were represented by the same counsel whereas the 3rd defendant was represented by another counsel at the trial. Since reference will be made to other actions which featured some of the parties in this suit, to avoid confusion, I shall refer to the plaintiff as Shanta, the 1st defendant as Aumkar and the 9th defendant as GUC. Where necessary, I shall refer to the 2nd, 3rd and 4th defendants as the "Patel brothers". I shall also, where necessary refer to Nitin Manubhai Amin (PW1) and Prabhakar Manubhai Amin (PW2) who are directors of Shanta as the "Amin brothers".

Background Facts

[2] The action of Shanta is related to their previous ownership of 9.99% of the shares of the Aumkar. Shanta claims that the majority shareholders led by the Patel brother made a sham sale of their 90.01% shares of Aumkar to a consortium of foreign investors represented by the 8th defendant. The 9th defendant (GUC) was incorporated on 14th February 2005 as the vehicle to purchase the shares of Aumkar.

[3] It was alleged that purpose of the sham sale was to compel Shanta to surrender their 9.99% stake in Aumkar to GUC. Under s 180(3) of the Companies Act 1965 , the owner of nine tenths of the shares of the subject company are entitled to apply to the court to compulsorily acquire the remaining shares from the minority shareholder.

[4] At the beginning of 2005, the shares of Aumkar were held by 11 companies:-

(i) Rajpat Sdn Bhd;

(ii) Hambros Investment Bhd;

(iii) Bedford Development Bhd;

(iv) Pacific Rim Plantation Ltd;

(v) Anglo Dutch Investment Ltd;

(vi) Bisha Sdn Bhd;

(vii) Prudential Investment Ltd;

(viii) Labh Investment Corporation;

(ix) Subh Investment Corporation;

(x) Sawitsinar Sdn Bhd;

(xi) Shanta Holdings Sdn Bhd.

[5] On 21st February 2005, the offer of GUC to purchase the shares of Aumkar was put to vote at the Extraordinary General Meeting (EGM). The 2nd to 5th defendants represented the shareholders at the said EGM with the exception of Shanta. They voted in favour of accepting the offer by GUC to purchase the shares of Aumkar at RM2.05. The only dissentient was Shanta.

Section 180 (3) Application By GUC

[6] After purchasing 90.01% of the shares of Aumkar, GUC instituted court proceedings (T(24) 65 of 2005) under s 180(3) of the Companies Act 1965 to compulsorily acquire the shares of Shanta at RM2.05 per ordinary share. I shall refer to these proceedings as "the 2005 action". Shanta objected to the application of GUC and contended that the fair value was RM5.50 per ordinary share.

[7] The High court (Linton Albert J) held that in the absence of any suggestion that GUC was acting "in bad faith in the sense that its objective is for some sinister purpose obtained by devious means, Shanta failed to establish that the offer is unfair". Consequently, the application of GUC was allowed on 28th September 2005.

[8] The appeal of Shanta to the court of Appeal failed. Before the court of Appeal, Counsel for Shanta argued two points. One argument was that GUC made the application in question to court before the expiry of the three-month period after service of the notice under s 180(3)(b) to the minority shareholder. The second point was that the High court Judge er