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2014 MarsdenLR 2094
HIGH COURT MALAYA KUALA LUMPUR
ILUSTRASI HIKMAT SDN BHD – Appellant
Versus
TAN SRI DATO SERI SYED MOKHTAR SHAH SYED NOR & ORS – Respondent
[Suit No: 22NCC-331-04-2013]
A court may strike out a claim as frivolous or vexatious when the plaintiff has no reasonable cause of action, particularly if they have waived rights related to the claim.
Headnote:(A) Rules of Court 2012 - Order 18 Rule 19(1)(a), (b), (d) - Summary dismissal of claim - The plaintiff's statement of claim was struck out for being frivolous, vexatious, and without a cause of action. The claim lacked merit and the factual circumstances indicated that the plaintiff had waived rights and acknowledged share transactions. (Paras 1, 55)
(B) Jurisprudential Principle - Summary procedures - Courts exercise caution in summarily dismissing claims, only in plain and obvious cases. The principle emphasizes the necessity for the case to be blatantly unsustainable before it can be struck out. (Paras 33, 36)
Facts of the case:
The plaintiff, a minority shareholder, claimed breaches of assurances by the defendants relating to shareholdings in a company. The court found the plaintiff's claims lacked standing as they had executed waivers of rights regarding share dealings, thus asserting that any claim against the defendants was unsustainable.
Findings of Court:
The statement of claim was found to be an abuse of process with no reasonable cause of action; the plaintiff had acquiesced in previous share transactions and accepted benefits from them.
Issues: The main issues were whether the plaintiff's claim had any basis and if the defendants could be held liable for the alleged breaches of agreement concerning share transactions and assurances made over a decade ago.
Ratio Decidendi: The court held that a claim must demonstrate a reasonable cause of action to proceed; the plaintiff's waiver of rights and participation in past transactions barred the claim. The claim was deemed frivolous and vexatious.
Result: The plaintiff's statement of claim was struck out with costs awarded to the defendants.
| Table of Content |
|---|
| 1. applications to strike out due to lack of cause of action. (Para 1 , 1 , 2 , 3) |
| 2. overview of parties and agreements (Para 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13) |
| 3. plaintiff's claim based on breach of assurances and lack of standing. (Para 14 , 15) |
[1] Enclosures 16, 18 and 20 are the 3rd, 1st and 2nd defendants' applications respectively pursuant to O 18 r 19(1)(a), (b) and (d) and/or O 92 of the Rules of 2012 ( ROC ) for an order to strike out the respondent's/plaintiff 's writ and statement of claim ("SOC") on the grounds that it is plain and obvious that the plaintiff does not have a cause of action. The SOC is scandalous, frivolous and vexatious and/or an abuse of the process of the Court. For the purpose of the hearing, the following documents were considered by this Court:
Enclosure 16
i) The writ of summons dated 9 April 2013;
ii) The statement of claim dated 8 April 2013;
iii) The defence of the 1st defendant dated 27 May 2013;
iv) The defence of the 2nd defendant dated 27 May 2013;
v) The defence of the 3rd defendant dated 27 May 2013;
vi) The defence of the 4th defendant dated 27 May 2013;
vii) The application to strike out dated 3 July 2013;
viii) The affidavit in support of the 3rd defendant affirmed on 2 July 2013;
ix) The affidavit in reply of the plaintiff affirmed on 29 July 2013; and
x) The affidavit in reply of the 3rd defendant affirmed on 16 August 2013.
Enclosure 18
i) The affidavits of Zuraida Zainal Abidin affirmed on 17 July 2013 and 12 August 2013 on behalf of the 3rd defendant;
ii) The affidavits of Nazliza Mohd Nasir affirmed on 2 July 2013 and 16 August 2013 on behalf of the 3rd defendant; and
iii) The affidavits of Azhar Md Awal affirmed on 17 July 2013 and 12 August 2013 on behalf of the 2nd defendant.
Enclosure 20
i) The writ of summons dated 9 April 2013;
ii) The statement of claim dated 8 April 2013;
iii) The defence of the 1st defendant dated 27 May 2013;
iv) The defence of the 2nd defendant dated 27 May 2013;
v) The defence of the 3rd defendant dated 27 May 2013;
vi) The defence of the 4th defendant dated 27 May 2013;
vii) The application to strike out by the 2nd defendant dated 19 July 2013;
viii) Affidavit in support of the 2nd defendant affirmed on 17 July 2013;
ix) The affidavit in support of the 3rd defendant affirmed on 2 July 2013;
x) The affidavit in reply of the plaintiff affirmed on 29 July 2013;
xi) The affidavit in reply of the 3rd defendant affirmed on 16 August 2013;
xii) Affidavit in support of the 1st defendant affirmed on 17 July 2013;
xiii) Affidavit in reply by the 1st defendant affirmed on 7 August 2013; and
xiv) Supplementary affidavit by the 3rd defendant affirmed on 20 August 2013.
Background
[2] On 14 April 1994, the 3rd defendant (Bernas) was incorporated by the Government of Malaysia (the Government). On 12 January 1996, the Government entered into an agreement with Bernas setting out the latter's commercial activities, rights and liabilities.
[3] On 11 July 1995, seven parties entered into a Shareholders Agreement (SA) to form a joint venture company called Budaya Generasi Sdn Bhd (4th defendant) for the purpose of entering into an agreement with the Government to purchase the shares of Bernas. The parties to the agreement were as follows:
i. Permatang Jaya Sdn Bhd (PJSB)
ii. Pertubuhan Peladang Kebangsaan (NAFAS)
iii. Persatuan Nelayan Kebangsaan (NEKMAT)
iv. ZAW Ventures Sdn Bhd (ZAW)
v. Simpletech Sdn Bhd (Simpletech)
vi. Syarikat Perniagaan Peladang (MADA) Sdn Bhd (SPPM)
vii. Syarikat Perniagaan Peladang (KADA) Sdn Bhd (SPPK)
[4] The objective of the company as stipulated in cl 2.2 of the said agreement,
"i. To enter into the contract; and
ii. To take over the rights and liabilities of BERNAS and perform its obligations."
[5] The authorised share capital was RM10 million divided into 10 million ordinary shares of RM1 each. Clause 4.1 of the same agreement sets out the shareholdings in the 4th defendant as follows:
[6] The parties to the said agreement also agreed to devise and implem
