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2010 MarsdenLR 3853

HIGH COURT MALAYA KUALA LUMPUR
EXTREME SYSTEM SDN BHD – Appellant
Versus
HO HUP CONSTRUCTION COMPANY BHD & ORS (NO 4) – Respondent
[Suit No: D-22 Ncc-146-2010]



Petitioner Advocates:S Suhendran,William Leong,Yap Soon Lee ,Respondent Advocate: SN Raj

The principles of implied undertaking protect confidentiality but can be lifted for public interest in transparency, especially when evidence is relevant and publicly available.

Headnote:(A) Malaysian Code on Take-Overs and Mergers 1998; Securities Commission Act 1993; Companies Act 1965 - Preliminary objection to the admissibility of evidence obtained through investigations by the Securities Commission - The principles of implied undertaking prevent documents obtained under compulsion from being used in unrelated proceedings - However, public interest and the need for transparency may allow such evidence if relevant to the matter at hand. (Paras 10, 15.1, 15.9)

(B) Implied undertaking - The principle protects confidentiality but can be modified as justice demands - Affidavits from investigations are considered public documents once filed. (Paras 19, 22)

(C) The court dismissed the Defendants' objection, allowing evidence from Investigation Officers to be admitted on the basis that it serves the interest of justice and does not serve a collateral purpose. (Paras 14.1, 24)

Facts of the case:
The Plaintiff sought compliance by Defendants with take-over laws, alleging a failure to disclose acquisitions and seeking injunctive relief and damages. The Defendants objected to evidence from investigations by SSM based on implied undertaking.

Findings of Court:
The evidence was deemed necessary for justice and the implied undertaking was not applicable as the affidavits were public documents.

Issues: The principal questions were whether the evidence was subject to an implied undertaking restricting its use and whether it could be disclosed in the current trial.

Ratio Decidendi: The court found that the implied undertaking does not apply as the documents were already public, and the disclosure is in connection with the matter being tried, supporting transparency.

Result: The Plaintiff was allowed to call the Investigation Officers as witnesses.

Table of Content
1. initiation and context of legal action regarding ho hup (Para 1 , 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9)
2. preliminary objections raised by defendants regarding evidence (Para 10 , 11)
3. defendants' arguments on implied undertaking principle (Para 12 , 13)
4. court's analysis on admissibility and undertaking (Para 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23)

[1] On 27/1/10 the Plaintiff filed this action against the 1st Defendant, Ho Hup Construction Company Bhd (Ho Hup) and 28 others. In it the Plaintiff sought to secure the compliance by the Defendants with the Malaysian Code on Take-Overs and Mergers 1998 (the Code) and the Securities Commission Act 1993 . (the SCA ). In particular the Plaintiff sought inter alia, the following reliefs:

a) A declaration that the 2nd to 29th Defendants are parties acting in concert in the acquisition of control of Ho Hup.

b) A declaration that the 2nd to 29th Defendants have breached the Code and the SCA in failing to make a mandatory general offer for the shares of Ho Hup.

c) An order directing the 2nd to 29th Defendants or one or more of them to make a mandatory general offer for the shares in Ho Hup in accordance with the provisions of the Code and/or the SCA .

d) Special and/or general damages and/or equitable compensation.

e) Damages at common law for conspiracy to injure.

f) Punitive damages and

g) Costs.

[2] Pending trial in this case investigations were commenced by Suruhanjaya Syarikat Malaysia (the SSM) into complaints made against the 2nd, 3rd and 5th Defendants for alleged offences under ss 69E and 69F of the Companies Act 1965 (the Act) .

[3] In the course of investigations statements were recorded by the Investigation Officers of SSM. The powers to investigate are under s 7D of the Act. Witnesses are obliged to answer all questions including questions to which the answers may be self-incriminating.

[4] As a result of the investigations, proceedings were commenced by the SSM against the 2nd, 3rd and 5th Defendants by way of an Originating Summons vide Kuala Lumpur High Court Case No: D-24NCC-67-2010 (the SSM OS) for injunctive relief to restrain the 2nd, 3rd and 5th Defendants from voting at an EGM of the 1st Defendant to be held on 4/2/10.

[5] The main ground of the application in the SSM OS was that the 2nd, 3rd and 5th Defendants failed to disclose as required under ss 4(1) , 7(1), 7(4) , 69D , 69E ,69F , 69M , 69N , 691, 368A(1)(a) and (b) of the Act , their acquisition of shares in Ho Hup.

[6] The SSM summoned various persons to give statements and to provide various documents and information to the Investigation Officers. These statements, information and documents obtained were then set out in affidavits affirmed by the Investigation Officers and filed in Court in support of the SSM OS (the Impugned Evidence). These affidavits are comprised in Jilid 5 to Jilid 9, Part C of the Plaintiff's Bundle of Documents. A consent order was entered in the SSM OS case where the 2nd and 5th Defendants were restrained from exercising their voting rights to shares in the 1st Defendant.

[7] On 29/10/10 when the Plaintiff opened its case Counsel for the Plaintiff informed the Court that he intended to call the Investigation Officers who had filed the affidavits in the SSM OS as witnesses. The Court was also informed that the witness statements of the Investigation Officers had been prepared and served on the Defendants. The objective in calling the Investigation Officers as witnesses was to put in evidence the Impugned Evidence obtained by the Investigation Officers during the SSM investigations.

[8] The Plaintiff intended to call 11 Investigation Officers (the SSM Witnesses).

[9] Counsel for the Defendants gave notice that he would be raising "a substantial preliminary objection as to the admissibility of the evidence that the SSM Witnesses were intending to give, in so far as the same relates to the Impugned Evidence, in this trial".

[10]Preliminary Objection by the 2nd, 4th to 7th Defe

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