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HIGH COURT MALAYA KUALA LUMPUR
IOUPAY LIMITED & ORS – Appellant
Versus
KUAN CHOON HSUING & ORS – Respondent
[Suit No: WA-22NCC-137-03/2023]
Key Points: - The court found that the Plaintiffs established a strong prima facie case for an Anton Piller order and a good arguable case for a Mareva injunction against the Defendants (!) (!) . - Evidence indicated a real risk of asset dissipation and destruction of evidence by the Defendants due to their deceitful conduct and disregard for court orders (!) (!) . - The court determined that the Plaintiffs' alleged impecuniosity, being a consequence of the Defendants' actions, did not negate their ability to provide a meaningful undertaking as to damages (!) (!) . - The Plaintiffs failed to make full and frank disclosure of material facts when applying for the ex-parte orders, which would typically warrant setting aside the orders (!) (!) . - Despite the non-disclosure, the court decided to grant inter partes injunctive relief in the interest of justice, as the undisclosed facts did not negate the strong prima facie case or the risk of asset dissipation (!) (!) . - The applications for an Anton Piller order and a Mareva injunction were allowed, while the Defendants' application to set aside the ex-parte orders was also allowed (!) . - The court emphasized the necessity of full and frank disclosure in ex-parte applications but found that the interest of justice warranted the granting of inter partes relief despite non-disclosure (!) (!) . - The Defendants' explanations for the transactions lacked credibility and were inconsistent with the evidence presented by the Plaintiffs (!) (!) . - The Plaintiffs alleged that the 1st Defendant misappropriated RM12.65 million, directing payments to his wife and related entities (!) (!) . - The Defendants denied wrongdoing and claimed non-disclosure by the Plaintiffs (!) (!) .
JUDGMENT
Introduction
[1] This judgment concerns the Plaintiffs' ex-parte applications seeking invasive orders against the Defendants - an Anton Piller order allowing search and seizure of the Defendants' premises and assets, and a Mareva injunction freezing the Defendants' assets in Malaysia. The Plaintiffs, a group of companies, allege that the 1st Defendant, a former senior employee, misappropriated substantial funds by directing payments to his wife (2nd Defendant), sister-in-law (3rd Defendant) and their company (4th Defendant). The Defendants vehemently deny any wrongdoing and contend the Plaintiffs failed to make full and frank disclosure of material facts to obtain these orders without notice. Separately, the Defendants have also applied to set aside the ex-parte orders on grounds of non-disclosure, lack of urgency and absence of legal requirements. This judgment needs to determine whether the Plaintiffs' applications met the stringent criteria for granting such injunctive orders, examine the allegations of non-disclosure by both sides, and adjudicate if the ex-parte orders ought to be sustained, discharged or modified.
Background Facts
[2] On 8 September 2021, the 3rd Plaintiff, IOU Pay (Asia) Sdn Bhd ("IOUPay Asia"), entered into a share purchase agreement to acquire 42% shares in iDestinasi Sdn Bhd ("IDSB") from Jiraniaga Sdn Bhd and Dato' Zainalabidin Mohamed Husain for a total purchase price of RM126 million. The purchase price was to be paid in two equal tranches of RM63 million each.
[3] The first tranche was completed on 30 November 2021. For the second tranche payment, IOUPay Asia had placed approximately RM21.7 million with Messrs Thomas Philip ("TP"), a firm of solicitors.
[4] Between 13 September 2021 and 29 September 2021, the 1st Defendant, Kuan Choon Hsuing ("Kenneth"), the then Group Chief Financial Officer of the IOUPay Group, had caused IOUPay Asia to make payments totaling RM12.65 million to the client account of Messrs Sidek Teoh Wong & Dennis ("STWD") purportedly to hold as stakeholders. The payments were RM3.15 million on 13 September 2021, RM2 million on 28 September 2021, and RM7.5 million on 29 September 2021.
[5] Subsequently, Kenneth had caused IOUPay Asia to instruct STWD to transfer these monies to various parties, including RM1.45 million to Piminik Investment Holdings Pte Ltd ('"Piminik Investment') on 14 September 2021, RM1,284,826.00 to the 4th Defendant, Aspire Project Management Sdn Bhd ("Aspire Project') and RM415,174.00 to Tabah Motors Sdn Bhd ("Tabah Motors") on 20 September 2021, RM2 million to one "Hendy" on 12 October 2021, and RM7.5 million to the 2nd Defendant, Yong Yuen Yeen ("Yong') on 6 October 2021. Yong is Kenneth's wife while Aspire Project is owned by Yong and the 4th Defendant, Yong Yuen Nee ("Yong YN"), Yong's sister and Kenneth's sister-in-law.
[6] On 26 February 2023, Paul William Russel ("Paul"), a director of the 1st Plaintiff, IOUPay Limited ("IOUPay Ltd"), asked Kenneth about the arrangements for TP to return the balance of approximately RM12.18 million to IOUPay Asia. On 28 February 2023, Kenneth forwarded an email allegedly from TP to Paul and Lee Chin Wee ("Aaron"), stating that TP would refund RM11.775 million plus interest to IOUPay Asia by 3 March 2023.
[7] However, IOUPay Asia never received the balance sum from TP. TP confirmed it did not hold RM11.775 million on behalf of IOUPay Asia and that the email forwarded by Kenneth was not from them. The email originated from "tp@thomasphillip.co" while TP's actual email address is "tp@thomasphillip. com.my".
[8] On 10 March 2023, IOUPay Ltd removed Edward Tan Tee Tong as director of IOUPay Asia and the 3nd Plaintiff, iSentric Sdn Bhd ("iSentric"). On 11 March 2023, Kenneth's employment as the GCFO was terminated.
[9] Subsequent investigations revealed that Kenneth had placed or caused Yong to be placed on the payroll of the 4th Plaintiff, Datamorph Services Sdn Bhd (" Datamorph"), a subsidiary
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