2011 MarsdenLR 3145
HIGH COURT MALAYA, KUALA LUMPUR
LIM YOI JOO LIM OY JOO – Appellant
Versus
MB INDUSTRIES SDN BHD – Respondent
[Originating Summon No. D-24Cc-307 Of 2010]
Important Points
Subject
Corporate Law - Director's Duties and Responsibilities
Act Referred
Headnote
Facts of the case:
Plaintiff claimed to have been wrongfully retained as director without notice of re-election and made serious allegations against previous directors without naming them. Prior disputes were noted.
Findings of Court:
Court dismissed both applications with costs to SSM, ordering plaintiff to pay RM 20,000.00 within 14 days.
Issues: Whether the plaintiff can seek declaratory relief without naming the tortfeasors and if a writ action is the proper mode.
Ratio Decidendi: Court reasoned that declaratory relief requires all necessary parties and cannot proceed with unsubstantiated allegations. The failure to name tortfeasors leads to dismissal of application.
Result: Applications dismissed with costs.
| Table of Content |
|---|
| 1. disputes regarding director status and re-election process. (Para 1) |
| 2. serious allegations require naming proper parties. (Para 2) |
| 3. court's discretion in declaratory relief and proper legal process. (Para 3) |
JUDGMENT
This is my JUDGMENT in respect of the plaintiff's application (enclosure 1) to seek a declaration that he has ceased to be a director of the defendant (which has been wound up) and the plaintiff's application (enclosure 6) inter alia to seek directions from the court to make the relevant and necessary parties as defendants in the action.
It must be noted that I have indicated to the plaintiff at the case management stage itself that there are serious allegations against the previous directors of the defendant and in consequence they should be named as defendant and a writ action would have been an appropriate mode. As a cautionary measure I have asked the papers to be served on the previous directors as well as Suruhanjaya Syarikat Malaysia (SSM). SSM made an application to intervene and I allowed the same. SSM is objecting to the application on the grounds that if enclosure 1 is allowed the defendant will have less than 2 directors, and the plaintiff is presently a director as per their record.
Brief facts
1. The plaintiff says he was a previous director of the defendant. There were various disputes between the plaintiff and the previous directors of the defendant. The plaintiff alleges that he ought to have retired as a director but the resolution at AGM shows that upon retiring as a director, the plaintiff allegedly offered himself for re-election and thereby was re-appointed as director. The plaintiff in this action says the plaintiff was not given any notice of the meeting or the proposal to re-elect him. And the plaintiff never offered himself for re-election, nor did he consent to be re-elected. In consequence the plaintiff is seeking the said declaration without naming the tortfeasors who have caused him the wrong. In Goldsmith v. Sperrings Ltd [1977] 2 All ER 566, Lord Denning MR made the following observation:-
"In a civilized society, legal process is the machinery for keeping order and doing justice. It can be used properly or it can be abused. It is used properly when it is invoked for the vindication of men's rights or the enforcement of just claims. It is abused when it is diverted from its true course so as to serve extortion or oppression; or to exert pressure so as to achieve an improper end. When it is so abused, it is a tort, a wrong known to the law"
2. I have read the enclosures 1 and 6. I take the view that both the applications must be dismissed. My reasons inter alia are as follows:-
(i) In this action the plaintiff is making serious allegations against the previous directors and/or shareholders of the defendant without naming them as parties. In addition a writ action would be more appropriate mode; more so when SSM is taking serious objection to the plaintiffs application on justifiable grounds. In consequence enclosure 6 must be dismissed in limine, save my previous order allowing the SSM to be made as an intervenor.
(ii) The plaintiff in support of his application relies on the court of Appeal case of Dato' Dr Hj. Mohamed Hanifa Hj Abdullah v. Koperasi Doktor Malaysia Bhd , , where it was stated that a person can only be made a party to an action where relief is claimed, against him. The proposition stated in the said case does not support the facts in the instant case, for the plaintiff's allegation is that the previous directors have committed a tort against him. Just because the plaintiff chooses not to claim any relief against the tortfeasors does not mean that principles stated in Dato' Dr. Hj. Mohamed Hanifa will be applicable.
(iii) It is trite that declaratory relief is a discretionary relief and all necessary and interested parties must be brought before the court and the plaintiff has a duty to plead the case appropriately to find liability against tortfeasors as