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2012 MarsdenLR 2316

COURT OF APPEAL PUTRAJAYA
KUAN PEK SENG – Appellant
Versus
ROBERT DORAN & ORS AND OTHER APPEALS – Respondent
[Civil Appeals No: W-02-1288-2011 W-02-424-2011 W-02-429-2011 W-02- 430-2011 W-02-432-2011 W-02-384-2011 W-02-479-2011 W-02-481-2011 W-02-482-2011 W-02-423-2011 W-02-431 2011 & W-02-501-2011]



In joint ventures, fiduciary duties arise, and accessory liability requires proof of dishonesty. Courts must assess damages based on actual losses tied to breaches, not merely total investments.

Headnote:(A) Breach of fiduciary duty; Knowing assistance - Joint ventures establish a fiduciary relationship. Alan's breach involved seizing control through dubious resolutions, leading to misappropriation of assets. Court upheld plaintiffs' claims against all defendants for complicity in breaches, imposing liability without clear findings on the individual involvement of each defendant. (Paras 49, 51, 53, 112)

(B) Accessory liability; Legal standards for dishonesty - Objective standards apply; knowledge of wrongdoing must be established for accessory liability to attach. Without a finding of dishonesty, accessory liability cannot stand. (Paras 55, 62, 70)

(C) Assessment of damages; Restitution principles - Award based on total investment plus unjust enrichment was disproportionate. Restitution must account for losses not directly resulting from breaches. Final award adjusted down to reflect true losses provable against Alan's actions, affirming restoration principles. (Paras 103, 106, 114)

Table of Content
1. overview of the joint venture and parties (Para 1 , 2 , 3 , 4)
2. details on the plaintiffs' claims and allegations (Para 5 , 6)
3. court's approach in evaluating evidence and findings. (Para 7 , 8 , 78)
4. assessment and implications of damages based on investment. (Para 9 , 17)
5. information on the shareholders agreements (Para 10 , 11 , 12 , 13 , 14)
6. breach of fiduciary duty and its implications. (Para 15)
7. requirements for validating claims against accessory liability. (Para 18 , 22 , 23 , 24)
8. nature of pleadings and fair notice (Para 19 , 20 , 21)
9. discrepancies in finding accessory liability. (Para 25 , 26 , 27)
10. consideration of the appeal and legal submissions (Para 28 , 29)
11. proof of loss occasioned by accessory liability. (Para 30 , 31)
12. breach of fiduciary duty and duties of joint venturers (Para 32 , 49 , 50)
13. assessment of exemplary damages and burden of proof. (Para 35 , 105)
14. consideration of losses and damages (Para 36 , 37 , 47)
15. court's final orders and their implications. (Para 48)
16. determining accessory liability (Para 84 , 85 , 86 , 87)
17. misapplication of damages assessment (Para 100 , 101 , 102)
18. final orders and outcomes (Para 112 , 113)

[1] "Nothing ventured, nothing gained". Robert Doran (Doran - 1st plaintiff) claimed he had a joint venture with Kuan Pek Seng @ Alan Kuan (Alan) to recycle plastic waste into plastic flakes and to produce plastic staple fibre from plastic flakes, but that he lost his entire investment by reason of Alans breach of the joint venture and breach of fiduciary duties. Doran claimed that his investment in the joint venture was made up of his cash injection of RM17,601,051.57, and his supply, through the 3rd plaintiff, of raw material (which was plastic waste) to the value of RM5,398,830.33. Apart from Alan, the plaintiffs also sought relief from defendants 2-24, whom the plaintiffs alleged had dishonestly assisted and/or abetted Alan.

[2] There were three plaintiffs. But for the purposes of these appeals, all three plaintiffs could be rolled into one, for Doran, a citizen of the United Kingdom who resided at Dubai, also controlled, through his control of Crayford Group Holdings of Iceland, both Plascon Technologies Ltd of Cyprus (2nd plaintiff - PT) and Tadweer FZE of the United Arab Emirates (3rd plaintiff - Tadweer). There were 24 defendants. Alan was defendant 1. Defendants 2 (Kuan Shin @ Kuan Nyong Hin), 3 (Tan Kim Hiok) and 4 (Tang Wan Yin) were Alans father, mother and wife. Defendant 3 was a director of defendants 13 (Liberty Equity Sdn Bhd), 14 (Doitbest Holdings Sdn Bhd), 22 (Plascon Technologies Sdn Bhd, in liquidation) & 24 (AK Plastictech Recycling Sdn Bhd). Defendant 4 was a substantial shareholder of defendant 14. Defendants 5 (Leong Kai Sing @ Deric Leong), 6 (Leong Fuk Sing @ Tony Leong) & 23 (Leong Kar Poh) were brothers. Defendants 6 and 23 were directors of defendant 16 (Techfident Engineering Sdn Bhd). Defendant 6 was also the sole proprietor of defendant 17 (Progressive Management Consult) and Alans brother-in-law. Defendant 7 (Selva Kumar a/l Mookiah) was the company secretary and legal advisor of defendant 22. Defendant 8 (Sri Ram a/l Mookiah), a director of defendant 22, controlled defendant 18 (Sri Chenderiang Sdn Bhd). Defendant 9 (Cheong Chan Wan @ George Cheong) was a director of defendant 13 as well as the chief operating officer of defendant 22s factory at Meru (defendant 9 who represented himself had not filed any memorandum of appeal. Nevertheless, defendant 9 was allowed to proceed with his appeal without objections from the plaintiffs). Defendant 13 was wholly owned by defendant 14. Defendants 14 and 19 (Target Concept Sdn Bhd) were controlled by Alan and/or his family. Defendant 15 (Ho Fatt Enterprise) erected defendant 22s factories at Teluk Panglima Garang (TPG) and Meru. Defendants 15, 16 & 17 were parties to three deeds of settlement of debts (three deeds of sale) by which defendants 15, 16 and 17 acq

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